Liberalism

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Prof, GILBERT MURRAY, D.Litt., LL.D., F.B.A.
The Rt. Hon. HERBERT FISHER, LL.D., F.B.A.
Prof. J. ARTHUR THOMSON, M.A., LL.D.
Prof. WILLIAM T. BREWSTER, M.A.

356 pages. - = In cloth or leather binding.

HISTORY AND GEOGRAPHY

■6. THE FRENCH REVOLUTION. By Hilaire Belloc, M.A. (With

Maps.)
4. A SHORT HISTORY OF WAR AND PEACE. By G. H. Ferris.
8. POLAR EXPLORATION. By DrW. S. Bruce, F.R.S.E., Leader of the

Scoiia Expedition. (With Maps.)

12. THE OPENING-UP OF AFRICA. By Sir H. H. Johnston, G.C.M.G.,

F.Z.S. (With Maps.)

13. MEDI/EVAL EUROPE. By H. W. C. Davis, M.A. (With Map^.)

14. THE PAPACY AND MODERN TIMES (1303-1870). By William

Barry, D.D.
23. HISTORY OF OUR TIME (1S85-1913). By G. P. Gooch, M.A.
2.5. THE CIVILISATION OF CHINA. By H. A. Giles, LL.D., Professor

of Chinese at Cambridge.
29. THE DAWN OF HISTORY. By J. L. Myres, M.A., F.S.A.

33. THE HISTORY OF ENGLAND. By Prof. A. F. Pollard, M.A. (With

a Chronological Table.)

34. CANADA. By A. G. Bradley.

37. PEOPLES AND PROBLEMS OF INDIA. By Sir T. W. Holdekness,

K.C.S.I.
42. ROME. By W. Warde Fowler, M.A.
48. THE AMERICAN CIVIL WAR. By F. L. Paxson.
51. WARFARE IN BRITAIN. By Hilaire Bei.i.oc, M.A.
55. MASTER MARINERS. By J. R. Speaks.

61. NAPOLEON. By ihe Rt. Hon. Hererrt F isker, I.L.D., K.B.A.

66. THE NAVY AND SRA POWER. By David Hannay.

71. GERMANY OF TO-DAY. By Charles Tower.

82. PREHISTORIC BRITAIN. By Robert Monro, M. A., M.D., LL.D.,
F.R.S.E. (Illustrated.)

91. THE ALPS. By Arnold Lunn, M.A. (Illustrated.)

92. CENTRAL AND SOUTH AMERICA. By Prof. W. R. Shepherd.

(Maps.)

97. THE ANCIENT EAST. . By D. G. Hogarth, M.A. (Maps.)

98. WARS BETWEEN ENGLAND AND AMERICA. By Prof. T. C.

Smith, M.A.

100. HISTORY OF SCOTLAND. By Prof. R. S. Rait.

101. BELGIUM. By R. C. K. Ensor. (Maps.)

105. POLAND. By Prof. W. Alison Phillips. (With Maps.)
107. SERBIA. By L. F. Waring.

LITERATURE AND ART

2. SHAKESPEARE. By John Masefield.

27. ENGLISH LITERATURE: MODERN. By G. H. Mair, M.A.

35. LANDMARKS IN FRENCH LITERATURE. By G. L. Stkachey.

39. ARCHITECTURE. By Prof. W. R. Lethaby. (Illustrated.)

43. ENGLISH LITERATURE : MEDIAEVAL. By Prof. W. P. Ker, M.A.

45. THE ENGLISH LANGUAGE. By L. Pearsall Smith, M.A.

52. GREAT WRITERS OF AMERICA. By Prof. J. Erskine and Prof.
W. P. Trent.

PAINTERS AND PAINTING. By Sir Frederick Wedmork. (With

16 half-tone Illustrations.) From the Primitives to the Impressionists.
DR JOHNSON AND HIS CIRCLE. By John Bailkv, M.A.

THE LITERATURE OF GERMANY. By Prof. J. G. Robertson,

M.A., Ph.D.
THE VICTORIAN AGE IN LITERATURE. ByG. K.Chesterton.
1. THE WRITING OF ENGLISH. By W.T. Brewster, A.M., Professor

of English in Columbia University.

i. ANCIENT ART AND RITUAL. By Jane E. Harrison, LL.D.,D.Litt.
i. EURIPIDES AND HIS AGE. By Gilbert Murray, D.Litt., LL.D.,
F.B.A.
87. CHAUCER AND HIS TIMES. By Grace E. Hadow.
89. WILLIAM MORRIS: HIS WORK AND INFLUENCE. By A.
Glutton Brock.

93. THE RENAISSANCE. By Edith Sichel.

96. ELIZABETHAN LITERATURE. By J. M. Robertson, M.P.

99. AN OUTLINE OF RUSSIAN LITERATURE. By Hon. Maurice

Baring.
103. MILTON. By John Bailey, M.A.

SCIENCE

7. MODERN GEOGRAPHY. By Marion I. Newbigin, D.Sc.

9. THE EVOLUTION OF PLANTS. By Dr D. H. .Scott, M.A,, F.R.S.

(Illustrated.)
17. HEALTH AND DISEASE. By W. Leslie Mackenzie, M.D.

18. INTRODUCTION TO MATHEMATICS. By A. N. Whitehead,

Sc.D., F.R.S. (With Diagrams.)

19. THE ANIMAL WORLD. By Prof. F. W. Gamble, F.R.S. With Intro-

duction by Sir Oliver Lodge. (Many Illustrations.)

20. EVOLUTION. By Prof. J. Arthur Tho.mson, M.A., and Prof. Patrick

Geddes.
22. CRIME AND INSANITY. By Dr C. A. Mercier.
28. PSYCHICAL RESEARCH. By Sir W. F. B.a.rrett, F.R.S.

31. ASTRONOMY. By A. R. Hinks, M.A., Chief Assistant, Cambridge

Observatory.

32, INTRODUCTION TO SCIENCE. By J. Arthur Thomson, M.A.
36. CLIMATE AND WEATHER. By Prof. H. N. Dickson, D.Sc.Oxon.,

M.A., F.R.S.E. (With Diagrams.)
41. ANTHROPOLOGY. By R. R. Marett, M.A.
U. THE PRINCIPLES OF PHYSIOLOGY. By Prof. J. G. McKendrick,

M.D.

46. MATTER AND ENERGY. By F. Soddv, M.A., F.R.S.

49. PSYCHOLOGY, THE STUDY OF BEH.WIOUR. By Prof. W.

McDougall, F.R.S., M.B.

53. THE MAKING OF THE EARTH. By Prof. J. W. Gregory, F.R.S.

(With 38 Maps and Figures.)
57. THE HUMAN BODY. By A. Keith, M.D., LL.D. (Illustrated.)
68. ELECTRICITY. By Gisbert Kapp, D.Eng. (Illustrated.)
62. THE ORIGIN AND NATURE OF LIFE. By Dr Benjamin Moore,

Professor of Bio-Chemistry, University College, Liverpool.

67. CHE.MISTRY. By Raphael Meldola, F.R.S. Presents clearly th^ way

in which chemical science has developed, and the stage it has reached.
72. PLANT LIFE. By Prof. J. B. Farmer, D.Sc, F.R.S. (Illustrated.)

78. THE OCEAN. A General Account of the Science of the Sea. By Sir

John Murray, K.C.B., F.R.S. (Colour Plates and other Illustrations.)

79. NERVES. By Prof. D. Eraser Harris, M.D., D.Sc. (Illustrated.) A

description, in non-technical language, of the nervous system, its intricate
mechanism, and the strange phenomena of energy and fatigue, with some
practical reflections.

86. SEX. By Prof. Patrick Geddes and Prof. J. Arthur Thomson, LL.D.

88. THE GROWTH OF EUROPE. By Prof. Grenville Cole. (Illus-
trated.)

PHILOSOPHY AND RELIGION

15. MOHAMMEDANISM. By Prof. D. S. Margoliouth, M.A., D.Litt.

40. THE PROBLEMS OF PHILOSOPHY. By the Hon. Bertrand
Russell, F.R.S.

47. BUDDHISM. By Mrs Rhys Davids, M.A.

50. NONCONFORMITY: ITS ORIGIN AND PROGRESS. By Principal

W. B. Selbie, M.A.

54. ETHICS. By G. E. Moore, M.A, '

56. THE MAKING OF THE NEW TESTAMENT. By Prof. B. W.
Bacon, LL.D., D.D.

60. MISSIONS : THEIR RISE AND DEVELOPMENT. By Mrs
Creighton.

68. COMPARATIVE RELIGION. By Prof. J. E.stun Carpenter, D.Litt.

74. A HISTORY OF FREEDOM OF THOUGHT. By J. B. Bury,
Litt.D., LL.D.

Si. LITERATURE OF THE OLD TESTAMENT. By Prof. Georgp
MooKE, D.D., LL.D.

90. THE CHURCH OF ENGLAND. By Canon E. W. Watson.

94. RELIGIOUS DEVELOPMENT BETWEEN THE OLD AND NEW

TESTAMENTS. By Canon R. H. Charles, D.D., D.Litt.
102. HISTORY OF PHILOSOPHY. By Clemsnt C. J. Webb.

SOCIAL SCIENCE

1. PARLIAMENT. Its History, Constitution, and Practice. By Sir
CouRTENAY P. Ilbert, G.C.B., K.C.S.I.

5. THE STOCK EXCHANGE. By F. W. Hirst, Editor of The Economist.

6. IRISH NATIONALITY. By Mrs J. R. Green.

10. THE SOCIALIST MOVEMENT. By J. Ramsay MacDonald, M.P.

11. CONSERVATISM. By Lord Hugh Cecil, M.A., M.P.
16. THE SCIENCE OF WEALTH. By J. A. Hobson, M.A.
21. LIBERALISM. By L. T. Hobhouse, M.A. ,

24. THE EVOLUTION OF INDUSTRY. By D. H. Macgregor, M.A.
26. AGRICULTURE.- By Prof. W. Somerville, F.L.S.
30. ELEMENTS OF ENGLISH LAW. By W. M. Geldart, M.A., B.C.L.
38. THE SCHOOL: AN INTRODUCTION TO THE STUDY OF

EDUCATION. By J. J. Findlay, M.A., Ph.D.
59. ELEMENTS OF POLITICAL ECONOMY. By S.J. Chapman, M.A.
69. THE NEWSPAPER. By G. Binney Dibblee, M.A. (Illustrated.)

The best account extant of the organisation of the newspaper piess, at

home and abroad.

77. SHELLEY, GODWIN, AND THEIR CIRCLE. By H. N.Brailsforu,
M.A.

?0. CO-PARTNERSHIP AND PROFIT-SHARING. By Aneurin
Williams, M.A.

PROBLEMS OF VILLAGE LIFE. By E. N. Bennett, M.A.

COMMON-SENSE IN LAW. By Prof. P. Vinogradoff, D.C.L.

UNEMPLOYMENT. By Prof. A. C. Pigou, M.A.

POLITICAL THOUGHT IN ENGLAND: FROM BACON TO
HALIFAX. By G. P. Gooch, M.A.

i. POLITICAL THOUGHT IN ENGLAND : FROM SPENCER TO
THE PRESENT DAY. By Ernest Barker, M.A.
106. POLITICAL THOUGHT IN ENGLAND: THE UTILITARIANS
FROM BENTHAM TO J. S. MILL. By W. L. Davidson,
M.A., LL.D.

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HOME UNIVERSITY LIBRARY
OF MODERN KNOWLEDGE

LIBERALISM

By L. T. HOBHOUSE, M.A-

London
WILLIAMS & NORGATE

HENRY HOLT & Co., New York
Canada : WM. BRTGGS, Toronto
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HOME

UNIVERSITY

LIBRARY

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MODERN KNOWLEDGE

Editon •
HERBERT FISHEa, M.A., F.B.A , LL.D.

Prof, GILBERT MURRAY, D.LlT-f.,
LL.D., F.B.A.

Prof. J. ARTHUR THOMSON, M.A.,

LL.D.
Prof. WILLIAM T. BREWSTER, M.,\.

(Columbia University, U.S.A.)

NEW YORK

HENRY HOLT AND COMPANY .

ii ■•

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UCSB LIBRAE

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IJ

LIBERALISM

L. T. HOBHOUSE, M.A.

PROFESSOR OF SOCIOLOGY, LONDON

UNIVERSITY, AUTHOR OF " DEMOCRACY

AUD REACTION," ETC.

Wi

r-

LONDON

WILLIAMS AND NORGATE

BY THE SAME AUTHOR,

DEMOCRACY AND REACTION

(2nd edition, 1909.) Unwin. Is.

MORALS IN EVOLUTION

(2nd edition, 1908.) Chapman & HalL 21s.

MIND IN EVOLUTION

(Macmillan.) 10s.

THE THEORY OF KNOWLEDGE

(Methvien.) 10s. 6i.

Fir it printed, May 1911
Reprinted, May 1919

CONTENTS

CHAP. PAGE

I BEFORE LIBERALISM .... 7

U THE ELEMENTS OF LIBERALISM

1. Civil Liberty. 2. Fiscal Liberty. 3. Per-
sonal Liberty. 4. Social Liberty. 5. Eco-
nomic Liberty. 6. Domestic Liberty. 7.
Local, Racial, and National Liberty. 8.
International Liberty, 9. Political Liberty
and Popular Sovereignty . . .21

III THE MOVEMENT OF THEORY ... 50

IV 'laissez-faire' . . , . ,78

V GLADSTONE AND MILL ... 102

VI THE HEART OF LIBERALISM . - .116

VII THE STATE AND THE INDIVIDUAL . . 138

VIII ECONOMIC LIBERALISM .... 167

IX THE FUTURE OF LIBERALISM . , .214

BIBLIOGRAPHY . , . , . 252

INDEX 253

The following volumes of kindred interest have already
been published in the Home University Library :

1. Parliament. By Sir C. P. Ilbert, G.C.B.

4. History of War and Peace. By G. H. Perria.

6. Irish Nationality. By Mrs. J. R. Green.

10. The Socialist Movement. By J. R. MacDonald, M.P.

11. Conservatism. By Lord Hugh Cecil, M.P.

23. History of Our Time (1885-1911). By G. P. Gooch.

24. The Evolution of Industry. By Prof. D. H. Mac-

gregor, M.A.

33. The History of England. By Prof. A. F. Pollard.

77. Shelley, Godwin, and their Circle. By H. N. Brailsford.

LIBEEALISM

CHAPTER I

BEFORE LIBERALISM

The modern State is the distinctive product
of a unique civilization. But it is a product
which is still in the making, and a part of the
process is a struggle between new and old
principles of social order. To understand the
new, which is our main purpose, we must
first cast a glance at the old. We must under-
stand what the social structure was, which —
mainly, as I shall show, under the inspira-
tion of Liberal ideas — is slowly but surely
giving place to the new fabric of the civic
State. The older structure itself was by no
means primitive. What is truly primitive is
very hard to say. But one thing is pretty
clear. At all times men have lived in societies,
and ties of kinship and of simple neighbour-
hood underlie every form of social organiza-

7

8 LIBERALISM

tion. In the simplest societies it seems
probable that these ties — reinforced and ex-
tended, perhaps, by religious or other beliefs —
are the only ones that seriously count. It is
certain that of the warp of descent and the
woof of intermarriage there is woven a tissue
out of which small and rude but close and
compact communities are formed. But the
ties of kinship and neighbourhood are effec-
tive only within narrow limits. While the
local group, the clan, or the village community
are often the centres of vigorous life, the
larger aggregate of the Tribe seldom attains
true social and political unity unless it rests
upon a military organization. But military
organization may serve not only to hold
one tribe together but also to hold other
tribes in subjection, and thereby, at the
cost of much that is most valuable in
primitive life, to establish a larger and at
the same time a more orderly society. Such
an order once established does not, indeed,
rest on naked force. The rulers become
invested with a sacrosanct authority. It may
be that they are gods or descendants of gods.
It may be that they are blessed and upheld
by an independent priesthood. In either case

BEFORE LIBERALISM 9

the powers that be extend their sway not
merely over the bodies but over the minds of
men. They are ordained of God because they
arrange the ordination. Such a government is
not necessarily abhorrent to the people nor in-
different to them. But it is essentially govern-
ment from above. So far as it affects the life
of the people at all, it does so by imposing on
them duties, as of military service, tribute,
ordinances, and even new laws, in such wise
and on such principles as seem good to itself.
It is not true, as a certain school of juris-
prudence held, that law is, as such, a command
imposed by a superior upon an inferior, and
backed by the sanctions of punishment.
But though this is not true of law in general
it is a roughly true description of law in that
particular stage of society which we may
conveniently describe as the Authoritarian.

Now, in the greater part of the world and
throughout the greater part of history the
two forms of social organization that have
been distinguished are the only forms to be
found. Of course, they themselves admit of
every possible variation of detail, but looking
below these variations we find the two re-
current types. On the one hand, there are

A 2

10 LIBERALISM

the small kinship groups, often vigorous
enough in themselves, but feeble for purposes
of united action. On the other hand, there
are larger societies varying in extent and in
degree of civilization from a petty negro
kingdom to the Chinese Empire, resting on a
certain union of military force and religious
or quasi-religious belief which, to select a
neutral name, we have called the principle of
Authority. In the lower stages of civiliza-
tion there appears, as a rule, to be only one
method of suppressing the strife of hostile
clans, maintaining the frontier against a
common enemy, or establishing the elements
of outward order. The alternative to author-
itarian rule is relapse into the comparative
anarchy of savage life.

But another method made its appearance
in classical antiquity. The city state of
ancient Greece and Italy was a new type of
social organization. It differed from the clan
and the commune in several ways. In the
first place it contained many clans and villages,
and perhaps owed its origin to the coming
together of separate clans on the basis not of
conquest but of comparatively bqual alliance.
Though very small as compared with an

BEFORE LIBERALISM 11

ancient empire or a modern state it was
much larger than a primitive kindred.
Its life was more varied and complex. It
allowed more free play to the individual,
and, indeed, as it developed, it suppressed
the old clan organization and substituted new
divisions, geographical or other. It was based,
in fact, not on kinship as such, but on civic
right, and this it was which distinguished it not
only from the commune, but from the Oriental
monarchy. The law which it recognized and
by which it lived was not a command imposed
by a superior government on a subject mass.
On the contrary, government was itself subject
to law, and law was the life of the state,
willingly supported by the entire body of free
citizens. In this sense the city state was a com-
munity of free men. Considered collectively
its citizens owned no master. They governed
themselves, subject only to principles and rules
of life descending from antiqiiity and owing
their force to the spontaneous allegiance of suc-
cessive generations. In such a community
some of the problems that vex us most presented
themselves in a very simple form. In particular
the relation of the individual to the com-
munity was close, direct, and natural. Their

12 LIBERALISM

interests were obviously bound up together.
Unless each man did his duty the State might
easily be destroyed and the population en-
slaved. Unless the State took thought for
its citizens it might easily decay. What was
still more important, there was no opposition
of church and state, no fissure between
political and religious life, between the claims
of the secular and the spiritual, to distract
the allegiance of the citizens, and to set the
authority of conscience against the duties of
patriotism. It was no feat of the philosophical
imagination, but a quite simple and natural
expression of the facts to describe such a
community as an association of men for the
purpose of living well. Ideals to which we
win our way back with difficulty and doubt
arose naturally out of the conditions of life in
ancient Greece.

On the other hand, this simple harmony
had very serious limitations, which in the end
involved the downfall of the city system. The
responsibilities and privileges of the associated
life were based not on the rights of human per-
sonality but on the rights of citizenship, and
citizenship was never co-extensive with the
community. The population included slaves

BEFORE LIBERALISM 13

or serfs, and in many cities there were large
classes descended from the original conquered
population, personally free but excluded from
the governing circle. Notwithstanding the
relative simplicity of social conditions the
city was constantly torn by the disputes of
faction — in part probably a legacy from the
old clan organization, in part a consequence of
the growth of wealth and the newer distinction
of classes. The evil of faction was aggravated
by the ill-success of the city organization in
dealing with the problem of inter-state rela-
tions. The Greek city clung to its autonomy,
and though the principle of federalism which
might have solved the problem was ultimately
brought into play, it came too late in Greek
history to save the nation.

The constructive genius of Rome devised a
different method of dealing with the political
problems involved in expanding relations.
Roman citizenship was extended till it in-
cluded all Italy and, later on, till it comprised
the whole free population of the Mediterranean
basin. But this extension was even more fatal
to the free self-government of a city state.
The population of Italy could not meet in the
Forum of Rome or the Plain of Mars to elect

14 LIBERALISM

consuls and pass laws, and the more widely it
was extended the less valuable for any politi-
cal purpose did citizenship become. The
history of Rome, in fact, might be taken as a
vast illustration of the difficulty of building up
an extended empire on any basis but that of
personal despotism resting on military force
and maintaining peace and order through
the efficiency of the bureaucratic machine.
In this vast mechanism it was the army
that was the seat of power, or rather it was
each army at its post on some distant frontier
that was a potential seat of power. The
" secret of the empire " that was early
divulged was that an emperor could be made
elsewhere than at Rome, and though a certain
sanctity remained to the person of the
emperor, and legists cherished a dim remem-
brance of the theory that he embodied the
popular will, the fact was that he was the
choice of a powerful army, ratified by the God
of Battles, and maintaining his power as long
as he could suppress any rival pretender.
The break-up of the Empire through the
continual repetition of military strife was
accelerated, not caused, by the presence of
barbarism both within and without the

BEFORE LIBERALISM 15

frontiers. To restore the elements of order
a compromise between central and local juris-
dictions was necessary, and the vassal became
a local prince owning an allegiance, more or
less real as the case might be, to a distant
sovereign. Meanwhile, with the prevailing
disorder the mass of the population in Western
Europe lost its freedom, partly through
conquest, partly through the necessity of
finding a protector in troublous times. The
social structure of the Middle Ages accordingly
assumed the hierarchical form which we speak
of as the Feudal system. In this thorough-
going application of the principle of authority
every man, in theory, had his master. The
serf held of his lord, who held of a great
seigneur, who held of the king. The king in
the completer theory held of the emperor,
who was crowned by the Pope, who held of
St. Peter. The chain of descent was complete
from the Ruler of the universe to the humblest
of the serfs.^ But within this order the growth

^ This is, of course, only one side of mediaeval theory,
but it is the side which lay nearest to the facts. The
reverse view, which derives the authority of government
from the governed, made its appearance in the Middle
Ages partly under the influence of classical tradition. But
its main interest and importance is that it served as a

16 LIBERALISM

of industry and commerce raised up new
centres of freedom. The towns in which men
were learning anew the lessons of association
for united defence and the regulation of
common interests, obtained charters of rights
from seigneur or king, and on the Continent
even succeeded in establishing complete inde-
pendence. Even in England, where from
the Conquest the central power was at its
strongest, the corporate towns became for
many purposes self-governing communities.
The city state was born again, and with it
came an outburst of activity, the revival
of literature and the arts, the rediscovery
of ancient learning, the rebirth of philosophy
and science.

The mediaeval city state was superior to
the ancient in that slavery was no essential
element in its existence. On the contrary,
by welcoming the fugitive serf and vindi-
cating his freedom it contributed power-
fully to the decline of the milder form of
servitude. But like the ancient state it

starting-point for the thought of a later time. On the
whole subject the reader may consult Gierke, Political
Theories of the Middle Age, translated by Maitland (Cam-
bridge University Press).

BEFORE LIBERALISM 17

was seriously and permanently weakened by
internal faction, and like the ancient state it
rested the privileges of its members not on
the rights of human personality, but on the
responsibilities of citizenship. It knew not so
much liberty as " liberties," rights of corpor-
ations secured by charter, its own rights as
a whole secured against king or feudatory and
the rest of the world, rights of gilds and
crafts within it, and to men or women only as
they were members of such bodies. But
the real weakness of the city state was
once more its isolation. It was but an islet
of relative freedom on, or actually within,
the borders of a feudal society which grew
more powerful with the generations. With
the improvement of communications and of
the arts of life, the central power, particularly
in France and England, began to gain upon
its vassals. Feudal disobedience and disorder
were suppressed, and by the end of the
fifteenth century great unified states, the
foundation of modern nations, were already
in being. Their emergence involved the
widening and in some respects the improve-
ment of the social order; and in its earlier
stages it favoured civic autonomy by sup-

18 LIBERALISM

pressing local anarchy and feudal privilege.
But the growth of centralization was in the
end incompatible with the genius of civic
independence, and perilous to such elements
of political right as had been gained for the
population in general as the result of earlier
conflicts between the crown and its vassals.

We enter on the modern period, accordingly,
with society constituted on a thoroughly
authoritarian basis, the kingly power supreme
and tending towards arbitrary despotism, and
below the king the social hierarchy extending
from the great territorial lord to the day-
labourer. There is one point gained as com-
pared to earlier forms of society. The base
of the pyramid is a class which at least enjoys
personal freedom. Serfdom has virtually dis-
appeared in England, and in the greater part
of France has either vanished or become
attenuated to certain obnoxious incidents
of the tenure of land. On the other hand, the
divorce of the English peasant from the soil
has begun, and has laid the foundation of the
future social problem as it is to appear in
this country.

The modern State accordingly starts from
the basis of an authoritarian order, and the

BEFORE LIBERALISM 19

protest against that order, a protest religious,
political, economic, social, and ethical, is the
historic beginning of Liberalism. Thus Liber-
alism appears at first as a criticism, some-
timies even as a destructive and revolutionary
criticism. Its negative aspect is for centuries
foremost. Its business seems to be not so
much to build up as to pull down, to remove
obstacles which block human progress, rather
than to point the positive goal of endeavour
or fashion the fabric of civilization. It finds
humanity oppressed, and would set it free.
It finds a people groaning under arbitrary rule,
a nation in bondage to a conquering race,
industrial enterprise obstructed by social
privileges or crippled by taxation, and it offers
relief. Everywhere it is removing superin-
cumbent weights, knocking off fetters, clearing
away obstructions. Is it doing as much for the
reconstruction that will be necessary when the
demolition is complete ? Is Liberalism at
bottom a constructive or only a destructive
principle ? Is it of permanent significance ?
Does it express some vital truth of social life
as such, or is it a temporary phenomenon
called forth by the special circumstances of
Western Europe, and is its work already so

20 LIBERALISM

far complete that it can be content to hand on
the torch to a newer and more constructive
principle, retiring for its own part from the
race, or perchance seeking more backward
lands for missionary work ? These are among
the questions that we shall have to answer.
We note, for the moment, that the circum-
stances of its origin suffice to explain the
predominance of critical and destructive
work without therefrom inferring the lack
of ultimate reconstructive power. In point
of fact, whether by the aid of Liberalism or
through the conservative instincts of the race,
the work of reconstruction has gone on side
by side with that of demolition, and becomes
more important generation by generation.
The modern State, as I shall show, goes far
towards incorporating the elements of Liberal
principle, and when we have seen what these
are, and to what extent they are actually
realized, we shall be in a better position to
understand the essentials of Liberalism, and
to determine the question of its permanent
value.

CHAPTER II

THE ELEMENTS OF LIBERALISM

I CANNOT here attempt so much as a sketch
of the historical progress of the Liberalizing
movement. I would call attention only to
the main points at which it assailed the old
order, and to the fundamental ideas directing
its advance.

1. Civil Liberty.

Both logically and historically the first
point of attack is arbitrary government, and
the first liberty to be secured is the right to
be dealt with in accordance with law. A man
who has no legal rights against another, but
stands entirely at his disposal, to be treated
according to his caprice, is a slave to that
other. He is " rightless," devoid of rights.
Now, in some barbaric monarchies the system
of rightlessness has at times been consistently
carried through in the relations of subjects

21

22 LIBERALISM

to the king. Here men and women, though
enjoying customary rights of person and
property as against one another, have no
rights at all as against the king's pleasure.
No European monarch or seignior has ever
admittedly enjoyed power of this kind, but
European governments have at various times
and in various directions exercised or claimed
powers no less arbitrary in principle. Thus,
by the side of the regular courts of law which
prescribe specific penalties for defined offences
proved against a man by a regular form of
trial, arbitrary governments resort to various
extrajudicial forms of arrest, detention, and
punishment, depending on their own will and
pleasure. Of such a character is punishment
by " administrative " process in Russia at the
present day; imprisonment by lettre de cachet
in France under the ancien regime; all
executions by so-called martial law in times
of rebellion, and the suspension of various
ordinary guarantees of immediate and fair
trial in Ireland. Arbitrary government in
this form was one of the first objects of
attack by the English Parliament in the
seventeenth century, and this first liberty of
the subject was vindicated by the Petition of

THE ELEMENTS OF LIBERALISM 23

Right, and again by the Habeas Corpus Act.
It is significant of much that this first step in
liberty should be in reality nothing more nor
less than a demand for law. " Freedom of
men under government," says Locke, sum-
ming up one whole chapter of seventeenth-
century controversy, "is to have a standing
rule to live by, common to every one of that
society and made by the legislative power
erected in it."

The first condition of universal freedom, that
is to say, is a measure of universal restraint.
Without such restraint some men may be free
but others will be unfree. One man may be
able to do all his will, but the rest will have no
will except that which he sees fit to allow them.
To put the same point from another side, the
first condition of free government is govern-
ment not by the arbitrary determination of
the ruler, but by fixed rules of law, to which
the ruler himself is subject. We draw the
important inference that there is no essential
antithesis between liberty and law. On the
contrary, law is essential to liberty. Law, of
course, restrains the individual; it is therefore
opposed to his liberty at a given moment and
in a given direction. But, equally, law restrains

24 LIBERALISM

others from doing with him as they will. It
liberates him from the fear of arbitrary aggres-
sion or coercion, and this is the only way,
indeed, the only sense, in which liberty for an
entire community is attainable.

There is one point tacitly postulated in this
argument which should not be overlooked. In
assuming that the reign of law guarantees
liberty to the whole community, we are assum-
ing that it is impartial. If there is one law for
the Government and another for its subjects,
one for noble and another for commoner, one
for rich and another for poor, the law does not
guarantee liberty for all. Liberty in this re-
spect implies equality. Hence the demand of
Liberalism for such a procedure as will ensure
the impartial application of law. Hence the
demand for the independence of the judiciary
to secure equality as between the Government
and its subjects. Hence the demand for cheap
procedure and accessible courts. Hence the
abolition of privileges of class. ^ Hence will

1 In England " benefit of clergy " was still a good plea
for remission of sentence for a number of crimes in the
seventeenth century. At that time all who could read
could claim benefit, which was therefore of the nature of
a privilege for the educated class. The requirement of
reading, which had become a form, was abolished in 1706,
but peers and clerks in holy orders could still plead their

THE ELEMENTS OF LIBERALISM 25

come in time the demand for the aboHtion
of the power of money to purchase skilled
advocacy.

2. Fiscal Liberty.

Closely connected with juristic liberty, and
more widely felt in everyday life, is the ques-
tion of fiscal liberty. The Stuarts brought
things to a head in this country by arbitrary
taxation. George III brought things to a
head in America by the same infallible method.
The immediate cause of the French Revolution
was the refusal of the nobles and the clergy to
bear their share of the financial burden. But
fiscal liberty raises more searching questions
than juristic liberty. It is not enough that
taxes should be fixed by a law applying univer-
sally and impartially, for taxes vary from year
to year in accordance with public needs, and
while other laws may remain stable and un-
changed for an indefinite period, taxation must,
in the nature of the case, be adjustable. It is
a matter, properly considered, for the Executive
rather than the Legislature. Hence the liberty

clergy in the eighteenth century, and the last relics of
the privilege were not finally abolished till the nineteenth
century.

-26 LIBERALISM

•of the subject in fiscal matters means the
restraint of the Executive, not merely by
established and written laws, but by a more
direct and constant supervision. It means,
in a word, responsible government, and that is
why we have more often heard the cry, " No
taxation without representation," than the
cry, " No legislation without representation."
Hence, from the seventeenth century onwards,
fiscal liberty was seen to involve what is called
political liberty.

3. Personal Liberty.

Of political liberty it will be more convenient
to speak later. But let us here observe that
there is another avenue by which it can be, and,
in fact, was, approached. We have seen that
the reign of law is the first step to liberty. A
man is not free when he is controlled by other
men, but only when he is controlled by prin-
ciples and rules which all society must obey,
for the community is the true master of the
free man. But here we are only at the begin-
ning of the matter. There may be law, and
there may be no attempt, such as the Stuarts
made, to set law aside, yet (1) the making and
maintenance of law may depend on the will of

THE ELEMENTS OF LIBERALISM 27

the sovereign or of an oligarchy, and (2) the con-
tent of the law may be unjust and oppressive
to some, to many, or to all except those who
make it. The first point brings us back to the
problem of political liberty, which we defer.
The second opens questions which have occu-
pied a great part of the history of Liberalism,
and to deal with them we have to ask what
types of law have been felt as peculiarly oppres-
sive, and in what respects it has been necessary
to claim liberty not merely through law, but
by the abolition of bad law and tyrannical
administration.

In the first place, there is the sphere of what
is called personal liberty — a sphere most
difficult to define, but the arena of the fiercest
strife of passion and the deepest feelings of
mankind. At the basis lies liberty of thought
— freedom from inquisition into opinions that
a man forms in his own mind^ — the inner
citadel where, if anywhere, the individual must
rule. But liberty of thought is of very little
avail without liberty to exchange thoughts —

1 See an interesting chapter in Faguet'8 Liberalisme,
which points out that the common saying that thought is
free is negated by any inquisition which compels a man to
disclose opinions, and penalizes him if they are not such
as to suit the inquisitor.

28 LIBERALISM

since thought is mainly a social product;
and so with liberty of thought goes liberty of
speech and liberty of writing, printing, and
peaceable discussion. These rights are not
free from difficulty and dubiety. There is a
point at which speech becomes indistinguish-
able from action, and free speech may mean
the right to create disorder. The limits of
just liberty here are easy to draw neither in
theory nor in practice. They lead us imme-
diately to one of the points at which liberty and
order may be in conflict, and it is with conflicts
of this kind that we shall have to deal. The
possibilities of conflict are not less in relation
to the connected right of liberty in religion.
That this liberty is absolute cannot be con-
tended. No modern state would tolerate a
form of religious worship which should include
cannibalism, human sacrifice, or the burning
of witches. In point of fact, practices of this
kind — which follow quite naturally from
various forms of primitive belief that are most
sincerely held — are habitually put down by
civilized peoples that are responsible for the
government of less developed races. The
British law recognizes polygamy in India, but
I imagine it would not be open either to a

THE ELEMENTS OF LIBERALISM 29

Mahommedan or a Hindu to contract two
marriages in England. Nor is it for liberty of
this kind that the battle has been fought.

What, then, is the primary meaning of
rehgious liberty ? Externally, I take it to
include the liberties of thought and expression,
and to add to these the right of worship in
any form which does not inflict injury on
others or involve a breach of public order.
This limitation appears to carry with it a
certain decency and restraint in expression
which avoids unnecessary insult to the feel-
ings of others; and I think this implication
must be allowed, though it makes some
room for strained and unfair applications.
Externally, again, we must note that the
demand for religious liberty soon goes beyond
mere toleration. Religious liberty is incom-
plete as long as any belief is penalized, as, for
example, by carrying with it exclusion from
ofifice or from educational advantages. On this
side, again, full liberty implies full equality.
Turning to the internal side, the spirit of
religious liberty rests on the conception that a
man's religion ranks with his own innermost
thought and feelings. It is the most concrete
expression of his personal attitude to life, to his

so LIBERALISM

kind, to the world, to his own origin and
destiny. There is no real religion that is not
thus drenched in personality; and the more
religion is recognized for spiritual the starker
the contradiction is felt to be that any one
should seek to impose a religion on another.
Properly regarded, the attempt is not wicked,
but impossible. Yet those sin most against
true religion who try to convert men from the
outside by mechanical means. They have the
lie in the soul, being most ignorant of the
nature of that for which they feel most deeply.
Yet here again we stumble on difficulties.
Religion is personal. Yet is not religion also
eminently social ? What is more vital to
the social order than its beliefs ? If we
send a man to gaol for stealing trash, what
shall we do to him whom, in our conscience and
on our honour, we believe to be corrupting the
hearts of mankind, and perhaps leading them
to eternal perdition ? Again, what in the
name of liberty are we to do to men whose
preaching, if followed out in act, would bring
back the rack and the stake ? Once more
there is a difficulty of delimitation which will
have to be fully sifted. I will only remark
here that our practice has arrived at a solu-

THE ELEMENTS OF LIBERALISM 31

tion which, upon the whole, appears to have
worked well hitherto, and which has its roots
in principle. It is open to a man to preach
the principles of Torquemada or the religion
of Mahomet. It is not open to men to
practise such of their precepts as would
violate the rights of others or cause a breach
of the peace. Expression is free, and worship
is free as far as it is the expression of personal
devotion. So far as they infringe the freedom,
or, more generally, the rights of others, the
practices inculcated by a religion cannot enjoy
unqualified freedom.

4. Social Liberty.

From the spiritual we turn to the practical
side of life. On this side we may observe,
first, that Liberalism has had to deal with
those restraints on the individual which flow
from the hierarchic organization of society,
and reserve certain offices, certain forms of
occupation, and perhaps the right or at least
the opportunity of education generally, to
people of a certain rank or class. In its more
extreme form this is a caste system, and
its restrictions are religious or legal as well
as social. In Europe it has taken more than

32 LIBERALISM

one form. There is the monopoly of certain
occupations by corporations, prominent in
the minds of eighteenth-century French re-
formers. There is the reservation of public
appointments and ecclesiastical patronage for
those who are " born," and there is a more
subtly pervading spirit of class which pro-
duces a hostile attitude to those who could and
would rise ; and this spirit finds a more material
ally in the educational difficulties that beset
brains unendowed with wealth. I need not
labour points which will be apparent to all,
but have again to remark two things. (1)
Once more the struggle for liberty is also,
when pushed through, a struggle for equality.
Freedom to choose and follow an occupation,
if it is to become fully effective, means equality
with others in the opportunities for following
such occupation. This is, in fact, one among
the various considerations which lead Liberal-
ism to support a national system of free
education, and will lead it further yet on the
same lines. (2) Once again, though we may
insist on the rights of the individual, the
social value of the corporation or quasi-
corporation, like the Trade Union, cannot be
ignored. Experience shows the necessity of

THE ELEMENTS OF LIBERALISM 33

some measure of collective regulation ik
industrial matters, and in the adjustment of
such regulation to individual liberty serious
difficulties of principle emerge. We shall
have to refer to these in the next section. But
one point is relevant at this stage. It is
clearly a matter of Liberal principle that
membership of a corporation ^should not
depend on any hereditary qualification, nor
be set about with any artificial difficulty of
entry, where by the term artificial is meant
any difficulty not involved in the nature of
the occupation concerned, but designed for
purposes of exclusiveness. As against all
such methods of restriction, the Liberal case
is clear.

It has only to be added here that restric-
tions of sex are in every respect parallel to
restrictions of class. There are, doubtless>
occupations for which women are unfit. But,,
if so, the test of fitness is sufficient to exclude
them. The " open road for women " is one
application, and a very big one, of the " open
road for talent," and to secure them both is
of the essence of Liberalism.

34 LIBERALISM

5. Economic Liberty

Apart from monopolies, industry was
shackled in the earlier part of the modern
period by restrictive legislation in various
forms, by navigation laws, and by tariffs. In
particular, the tariff was not merely an obstruc-
tion to free enterprise, but a source of inequality
as between trade and trade. Its fundamental
effect is to transfer capital and labour from the
objects on which they can be most profitably
employed in a given locality, to objects on
which they are less profitably employed, by
endowing certain industries to the disadvan-
tage of the general consumer. Here, again,
the Liberal movement is at once an attack on
an obstruction and on an inequality. In most
countries the attack has succeeded in breaking
down local tariffs and establishing relatively
large Free Trade units. It is only in England,
and only owing to our early manufacturing
supremacy, that it has fully succeeded in over-
coming the Protective principle, and even in
England the Protectionist reaction would un-
doubtedly have gained at least a temporary
victory but for our dependence on foreign
countries for food and the materials of indus-

THE ELEMENTS OF LIBERALISM 35

try. The most striking victory of Liberal
ideas is one of the most precarious. At the
same time, the battle is one which Liberalism
is always prepared to fight over again. It has
led to no back stroke, no counter-movement
within the Liberal ranks themselves.

It is otherwise with organized restrictions
upon industry. The old regulations, which
were quite unsuited to the conditions of the
time, either fell into desuetude during the
eighteenth century, or were formally abolished
.during the earlier years of the industrial
revolution. For a while it seemed as though
wholly unrestricted industrial enterprise was
to be the progressive watchword, and the
echoes of that time still linger. But the
old restrictions had not been formally with-
drawn before a new process of regulation
began. The conditions produced by the new
factory system shocked the public conscience ;
and as early as 1802 we find the first of
a long series of laws, out of which has
grown an industrial code that year by year
follows the life of the operative, in his
relations with his employer, into more
minute detail. The first stages of this move-
ment were contemplated with doubt and

36 LIBERALISM

distrust by many men of Liberal sympathies.
The intention was, doubtless, to protect the
weaker party, but the method was that of
interference with freedom of contract. Now
the freedom of the sane adult individual — even
such strong individualists as Cobden recog-
nized that the case of children stood apart —
carried with it the right of concluding such
agreements as seemed best to suit his own
interests, and involved both the right and the
duty of determining the lines of his life for
himself. Free contract and personal respon-
sibility lay close to the heart of the whole
Liberal movement. Hence the doubts felt by
so many Liberals as to the regulation of
industry by law. None the less, as time
has gone on, men of the keenest Liberal sym-
pathies have come not merely to accept but
eagerly to advance the extension of public
control in the industrial sphere, and of col-
lective responsibility in the matter of the
education and even the feeding of children,
the housing of the industrial population, the
care of the sick and aged, the provision of
the means of regular employment. On this
side Liberalism seems definitely to have re-
traced its steps, and we shall have to

THE ELEMENTS OF LIBERALISM 37

inquire closely into the question whether
the reversal is a change of principle or of
application.

Closely coiuiected with freedom of contract
is freedom of association. If men may make
any agreement with one another in their
mutual interest so long as they do not injure
a third party, they may apparently agree to
act together permanently for any purposes
of common interest on the same conditions.
That is, they may form associations. Yet at
bottom the powers of an association are some-
thing very different from the powers of the
individuals composing it; and it is only by legal
pedantry that the attempt can be made to
regulate the behaviour of an association on
principles derived from and suitable to the
relations of individuals. An association might
become so powerful as to form a state within
the state, and to contend with government
on no unequal terms. The history of some
revolutionary societies, of some ecclesiastical
organizations, even of some American trusts
might be quoted to show that the danger is
not imaginary. Short of this, an association
may act oppressively towards others and even
towards its own members, and the function

38 LIBERALISM

of Liberalism may be rather to protect the
individual against the power of the association
than to protect the right of association against
the restriction of the law. In fact, in this
regard, the principle of liberty cuts both ways,
and this double application is reflected in
history. The emancipation of trade unions,
however, extending over the period from
1824 to 1906, and perhaps not yet complete,
was in the main a liberating movement,
because combination was necessary to place
the workman on something approaching
terms of equality with the employer, and
because tacit combinations of employers
could never, in fact, be prevented by law.
It was, again, a movement to liberty
through equality. On the other hand, the
oppressive capacities of a trade union could
never be left out of account, while combina-
tions of capital, which might be infinitely
more powerful, have justly been regarded with
distrust. In this there is no inconsistency
of principle, but a just appreciation of a real
difference of circumstance. Upon the whole
it may be said that the function of Liberalism
is not so much to maintain a general right of
free association as to define the right in each

THE ELEMENTS OF LIBERALISM 39

case in such terms as make for the maximum
of real hberty and equahty.

6. Domestic Liberty.

Of all associations within the State, the
miniature community of the Family is the most
universal and of the strongest independent
vitality. The authoritarian state was re-
flected in the authoritarian family, in which
the husband was within wide limits absolute
lord of the person and property of wife and
children. The movement of liberation con-
sists (1) in rendering the wife a fully responsible
individual, capable of holding property, suing
and being sued, conducting business on her
own account, and enjoying full personal protec-
tion against her husband; (2) in establishing
marriage as far as the law is concerned on a
purely contractual basis, and leaving the
sacramental aspect of marriage to the ordin-
ances of the religion professed by the parties;
(3) in securing the physical, mental, and moral
care of the children, partly by imposing definite
responsibilities on the parents and punishing
them for neglect, partly by elaborating a public
system of education and of hygiene. The
first two movements are sufficiently typical

40 LIBERALISM

<cases of the interdependence of liberty and
^equality. The third is more often conceived as
s. Sociahstic than a Liberal tendency, and, in
point of fact, the State control of education
:gives rise to some searching questions of prin-
ciple, which have not yet been fully solved.
If, in general, education is a duty which the
State has a right to enforce, there is a counter-
vailing right of choice as to the lines of
education which it would be ill to ignore,
and the mode of adjustment has not yet
been adequately determined either in theory
or in practice. I would, however, strongly
maintain that the general conception of the
State as Over-parent is quite as truly Liberal
as Socialistic. It is the basis of the rights
of the child, of his protection against parental
neglect, of the equality of opportunity which
he may claim as a future citizen, of his
training to fill his place as a grown-up
person in the social system. Liberty once
more involves control and restraint.

7. Local, Racial, and National Libetiy.
From the smallest social unit we pass to the
largest. A great part of the liberating move-
anent is occupied with the struggle of entire

THE ELEMENTS OF LIBERALISM 41

nations against alien rule, with the revolt
of Europe against Napoleon, with the struggle
of Italy for freedom, with the fate of
the Christian subjects of Turkey, with the
emancipation of the negro, with the national
movement in Ireland and in India. Many of
these struggles present the problem of liberty
in its simplest form. It has been and is too
often a question of securing the most element-
ary rights for the weaker party; and those who
are not touched by the appeal are deficient
rather in imagination than in logic or ethics.
But at the back of national movements very
difficult questions do arise. What is a nation
as distinct from a state ? What sort of unity
does it constitute, and what are its rights ?
If Ireland is a nation, is Ulster one ? and if
Ulster is a British and Protestant nation, what
of the Catholic half of Ulster ? History has
in some cases given us a practical answer.
Thus, it has shown that, enjoying the gift of
responsible government, French and British,
despite all historical quarrels and all differences
of religious belief, language, and social struc-
ture, have fused into the nation of Canada.
History has justified the conviction that
Germany was a nation, and tlirown ridicule

B 2

42 LIBERALISM

on the contemptuous saying of Metternich
that Italy was a geographical expression. But
how to anticipate history, what rights to
concede to a people that claims to be a self-
determining unit, is less easy to decide. There
is no doubt that the general tendency of
Liberalism is to favour autonomy, but, faced
as it is with the problems of subdivision and
the complexity of group with group, it has to
rely on the concrete teaching of history and
the practical insight of statesmanship to
determine how the lines of autonomy are to be
drawn. There is, however, one empirical test
which seems generally applicable. Where a
weaker nation incorporated with a larger or
stronger one can be governed by ordinary
law applicable to both parties to the union,
and fulfilling all the ordinary principles of
liberty, the arrangement may be the best for
both parties. But where this system fails,
where the government is constantly forced to
resort to exceptional legislation or perhaps to
de-liberalize its own institutions, the case
becomes urgent. Under such conditions the
most liberally-minded democracy is maintain-
ing a system which must undermine its
own principles. The Assj^rian conqueror, Mr.

THE ELEMENTS OF LIBERALISM 43

Herbert Spencer remarks, who is depicted in
the bas-reliefs leading his captive by a cord,
is bound with that cord himself. He forfeits
his liberty as long as he retains his power.

Somewhat similar questions arise about
race, which many people wrongly confuse
with nationality. So far as elementary rights
are concerned there can be no question as to
the attitude of Liberalism. When the political
power which should guarantee such rights is
brought into view, questions of fact arise.
Is the Negro or the Kaffir mentally and
morally capable of self-government or of taking
part in a self-governing State ? The experi-
ence of Cape Colony tends to the affirmative
view. American experience of the negro
gives, I take it, a more doubtful answer. A
specious extension of the white man's rights to
the black may be the best way of ruining the
black. To destroy tribal custom by introducing
conceptions of individual property, the free
disposal of land, and the free purchase of gin
may be the handiest method for the expropri-
ator. In all relations with weaker peoples
we move in an atmosphere vitiated by the
insincere use of high-sounding words. If men
say equality, they mean oppression by forms

44 LIBERALISM

of justice. If they say tutelage, they appear
to mean the kind of tutelage extended to the
fattened goosei In such an atmosphere, per-
haps, our safest course, so far as principles and
deductions avail at all, is to fix our eyes on the
elements of the matter, and in any part of the
world to support whatever method succeeds
in securing the " coloured " man from personal
violence, from the lash, from expropriation,
and from gin ; above all, so far as it may yet
be, from the white man himself. Until the
white man has fully learnt to rule his own life,
the best of all things that he can do with the
dark man is to do nothing with him. In
this relation, the day of a more constructive
Liberalism is yet to come.

8. International Liberty.

If non-interference is the best thing for the
barbarian many Liberals have thought it to
be the supreme wisdom in international affairs
generally. I shall examine this view later.
Here I merely remark : (1) It is of the essence
of Liberalism to oppose the use of force, the
basis of all tyranny. (2) It is one of its prac-
tical necessities to withstand the tyranny

THE ELEMENTS OF LIBERALISM 45

of armaments. Not only may the military
force be directly turned against liberty, as in
Russia, but there are more subtle ways, as
in Western Europe, in which the military
spirit eats into free institutions and absorbs
the public resources which might go to the
adv?incement of civilization. (3) In proportion
as the world becomes free, the use of force
becomes meaningless. There is no purpose
in aggression if it is not to issue in one form
or another of national subjection.

9. Political Liberty and Popular Sovereignty.

Underlying all these questions of right is
the question how they are to be secured and
maintained. By enforcing the responsibility
of the executive and legislature to the com-
munity as a whole ? Such is the general answer,
and it indicates one of the lines of connection
between the general theory of liberty and the
doctrine of universal suffrage and the sove-
reignty of the people. The answer, however,
does not meet all the possibilities of the case.
The people as a whole might be careless of
their rights and incapable of managing them.
They might be set on the conquest of others,

46 LIBERALISM

the expropriation of the rich, or on any form
of collective tyranny or folly. It is perfectly
possible that from the point of view of general
liberty and social progress a limited franchise
might give better results than one that is more
extended. Even in this country it is a
tenable view that the extension of the suffrage
in 1884 tended for some years to arrest the
development of liberty in various directions.
On what theory does the principle of popular
sovereignty rest, and within what limits does
it hold good ? Is it a part of the general
principles of liberty and equality, or are other
ideas involved ? These are among the ques-
tions which we shall have to examine.

We have now passed the main phases of the
Liberal movement in very summary review,
and we have noted, first, that it is coextensive
with life. It is concerned with the individual,
the family, the State. It touches industry,
law, religion, ethics. It would not be difficult,
if space allowed, to illustrate its influence in
literature and art, to describe the war with
convention, insincerity, and patronage, and the
struggle for free self-expression, for reality,
for the artist's soul. Liberalism is an all-
penetrating element of the life -structure of the

THE ELEMENTS OF LIBERALISM 47

modem world. Secondly, it is an effective
historical force. If its work is nowhere
complete, it is almost everywhere in progress.
The modern State as we see it in Europe out-
side Russia, in the British colonies, in North
and South America, as we begin to see it in
the Russian empire and throughout the vast
continent of Asia, is the old authoritarian
society modified in greater or less degree by the
absorption of Liberal principles. Turning,
thirdly, to those principles themselves, we have
recognized Liberalism in every department as
a movement fairly denoted by the name — a
movement of liberation, a clearance of obstruc-
tions, an opening of channels for the flow of
free spontaneous vital activity. Fourthly,
we have seen that in a large number of cases
what is under one aspect a movement for
liberty is on another side a movement towards
equality, and the habitual association of these
principles is so far confirmed. On the other
hand, lastly, we have seen numerous cases
in which the exacter definition of liberty and
the precise meaning of equality remain ob-
scure, and to discuss these will be our task.
We have, moreover, admittedly regarded
Liberalism mainly in its earlier and more

48 LIBERALISM

negative aspect. We have seen it as a force
working within an old society and modifying
it by the loosening of the bonds which its struc-
ture imposed on human activity. We have yet
to ask what constructive social scheme, if any,
could be formed on Liberal principles; and it
is here, if at all, that the fuller meaning of
the principles of Liberty and Equality should
appear, and the methods of applying them be
made out. The problem of popular sove-
reignty pointed to the same need. Thus the
lines of the remainder of our task are clearly
laid down. We have to get at the fundamen-
tals of Liberalism, and to consider what kind
of structure can be raised upon the basis
which they offer. We will approach the
question by tracing the historic movement of
Liberal thought through certain well-marked
phases. We shall see how the problems
which have been indicated were attacked by
successive thinkers, and how partial solutions
gave occasion for deeper probings. Following
the guidance of the actual movement of ideas,
we shall reach the centre and heart of Liberal-
ism, and we shall try to form a conception of
the essentials of the Liberal creed as a con-
structive theory of society. This conception

THE ELEMENTS OF LIBERALISM 49

we shall then apply to the greater questions,
political and economic, of our own day; and
this will enable us finally to estimate the present
position of Liberalism as a living force in the
modern world and the prospect of transform-
ing its ideals into actualities.

CHAPTER III

THE MOVEMENT OF THEORY

Great changes are not caused by ideas
alone; but they are not effected without ideas.
The passions of men must be aroused if the
frost of custom is to be broken or the chains
of authority burst; but passion of itself is
blind and its world is chaotic. To be effective
men must act together, and to act together
they must have a common understanding
and a common object. When it comes to be
a question of any far-reaching change, they
must not merely conceive their own immedi-
ate end with clearness. They must convert
others, they must communicate sympathy
and win over the unconvinced. Upon the
whole, they must show that their object is
possible, that it is compatible with existing
institutions, or at any rate with some workable
form of social life. They are, in fact, driven
on by the requirements of their position to

50

THE MOVEMENT OF THEORY 51

the elaboration of ideas, and in the end to
some sort of social philosophy; and the
philosophies that have driving force behind
them are those which arise after this fashion
out of the practical demands of hmnan feel-
ing. The philosophies that remain ineffectual
and academic are those that are formed by
abstract reflection without relation to the
thirsty souls of human kind.

In England, it is true, where men are apt
to be shy and unhandy in the region of theory,
the Liberal movement has often sought to
dispense with general principles. In its early
days and in its more moderate forms, it
sought its ends under the guise of constitu-
tionalism. As against the claims of the
Stuart monarchy, there was a historic case
as well as a philosophic argument, and the
earlier leaders of the Parliament relied more
on precedent than on principle. This
method was embodied in the Whig tradition,
and runs on to our own time, as one of the
elements that go to make up the working
constitution of the Liberal mind. It is, so to
say, the Conservative element in Liberalism,
valuable in resistance to encroachments,
valuable in securing continuity of develop-

52 LIBERALISM

ment, for purposes of re-construction in-
sufficient. To maintain the old order under
changed circumstances may be, in fact, to
initiate a revolution. It was so in the seven-
teenth century. Pym and his followers
could find justification for their contentions
in our constitutional history, but to do so
they had to go behind both the Stuarts and
the Tudors ; and to apply the principles of the
fourteenth and fifteenth centuries in 1640
was, in effect, to institute a revolution. In
our own time, to maintain the right of the
Commons against the Lords is, on the face of
it, to adhere to old constitutional right, but
to do so under the new circumstances which
have made the Commons representative of the
nation as a whole is, in reality, to establish
democracy for the first time on a firm footing,
and this, again, is to accomplish a revolution.
Now, those who effect a revolution ought to
know whither they are leading the world.
They have need of a social theory — and in point
of fact the more thorough-going apostles of
movement always have such a theory; and
though, as we have remarked, the theory
emerges from the practical needs which they
feel, and is therefore apt to invest ideas of

THE MOVEMENT OF THEORY 53

merely temporary value with the character
of eternal truths, it is not on this account
to be dismissed as of secondary importance.
Once formed, it reacts upon the minds of its
adherents, and gives direction and unity to
their efforts. It becomes, in its turn, a real
historic force, and the degree of its coherence
and adequacy is matter, not merely of academic
interest, but of practical moment. More-
over, the onward course of a movement is
more clearly understood by appreciating the
successive points of view which its thinkers
and statesmen have occupied than by follow-
ing the devious turnings of political events and
the tangle of party controversy. The point
of view naturally affects the whole method of
handling problems, whether speculative or
practical, and to the historian it serves as
a centre around which ideas and policies that
perhaps differ, and even conflict v/ith one
another, may be so grouped as to show their
underlying affinities. Let us then seek to
determine the principal points of view which
the Liberal movement has occupied, and dis-
tinguish the main types of theory in which
the passion for freedom has sought to express
itself.

54 LIBERALISM

The first of these types I will call the
theory of the Natural Order.

The earlier Liberalism had to deal with
authoritarian government in church and state.
It had to vindicate the elements of personal,
civil, and economic freedom; and in so doing
it took its stand on the rights of man, and,
in proportion as it was forced to be construc-
tive, on the supposed harmony of the natural
order. Government claimed supernatural
sanction and divine ordinance. Liberal theory
replied in effect that the rights of man rested
on the law of Nature, and those of government
on human institution. The oldest " insti-
tution " in this view was the individual, and
the primordial society the natural grouping
of human beings under the influence of family
affection, and for the sake of mutual aid.
Political society was a more artificial arrange-
ment, a convention arrived at for the specific
purpose of securing a better order and main-
taining the common safety. It was, perhaps,
as Locke held, founded on a contract between
king and people, a contract which was brought
to an end if either party violated its terms.
Or, as in Rousseau's view, it was essentially a
contract of the people with one another, an

THE MOVEMENT OF THEORY 55

arrangement by means of which, out of many
conflicting individual wills, a common or
general will could be formed. A government
might be instituted as the organ of this will,
but it would, from the nature of the case,
be subordinate to the people from whom it
derived authority. The people were sovereign.
The government was their delegate.

Whatever the differences of outlook that
divide these theories, those who from Locke to
Rousseau and Paine worked with this order of
ideas agreed in conceiving political society
as a restraint to which men voluntarily
submitted themselves for specific purposes.
Political institutions were the source of sub-
jection and inequality. Before and behind
them stood the assemblage of free and equal
individuals. But the isolated individual was
powerless. He had rights which were limited
only by the corresponding rights of others, but
he could not, unless chance gave him the
upper hand, enforce them. Accordingly, he
found it best to enter into an arrangement with
others for the mutual respect of rights; and
for this purpose he instituted a government
to maintain his rights within the community
and to guard the community from assault

56 LIBERALISM

from without. It followed that the function
of government was limited and definable.
It was to maintain the natural rights of
man as accurately as the conditions of society-
allowed, and to do naught beside. Any
further action employing the compulsory
power of the State was of the nature of an
infringement of the understanding on which
government rested. In entering into the
compact, the individual gave up so much of
his rights as was necessitated by the condition
of submitting to a common rule — so much,
and no more. He gave up his natural rights
and received in return civil rights, something
less complete, perhaps, but more effective as
resting on the guarantee of the collective
power. If you would discover, then, what the
civil rights of man in society should be, you
must inquire what are the natural rights of
man,^ and how far they are unavoidably
modified in accommodating the conflicting

^ Gf. the preamble to the Declaration of the Rights of
Man by the French National Assembly in 1789. The
Assembly lays down " the natural, inalienable, and sacred
rights of man," in order, among other things, " that the
acts of the legislative power and those of the executive
power, being capable of being at every instant compared
with the end of every political institution, may be more
respected accordingly."

THE MOVEMENT OF THEORY 57

claims of men with one another. Any inter-
ference that goes beyond this necessary accom-
modation is oppression. Civil rights should
agree as nearly as possible with natural rights,
or, as Paine says, a civil right is a natural
right exchanged.

This conception of the relations of the State
and the individual long outlived the theory on
which it rested. It underlies the entire teach-
ing of the Manchester school. Its spirit was
absorbed, as we shall see, by many of the
Utilitarians. It operated, though in diminish-
ing force, throughout the nineteenth century;
and it is strongly held by contemporary
Liberals like M. Faguet, who frankly abrogate
its speculative foundations and rest their case
on social utility. Its strength is, in effect, not
in its logical principles, but in the compactness
and consistency which it gives to a view of
the functions of the State which responds to
certain needs of modern society. As long as
those needs were uppermost, the theory was
of living value. In proportion as they have
been satisfied and other needs have emerged,
the requirement has arisen for a fuller and
sounder principle.

But there was another side to the theory

58 LIBERALISM

of nature which we must not ignore. If in
this theory government is the marplot and
authority the source of oppression and stag-
nation, where are the springs of progress and
civiHzation ? Clearly, in the action of indi-
viduals. The more the individual receives free
scope for the play of his faculties, the more
rapidly will society as a whole advance.
There are here the elements of an important
truth, but what is the implication ? If the
individual is free, any two individuals, each
pursuing his own ends, may find themselves
in conflict. It was, in fact, the possibility
of such conflict which was recognized by our
theory as the origin and foundation of society.
Men had to agree to some measure of mutual
restraint in order that their liberty might be
effective. But in the course of the eighteenth
century, and particularly in the economic
sphere, there arose a view that the conflict of
wills is based on misunderstanding and ignor-
ance, and that its mischiefs are accentuated
by governmental repression. At bottom there
is a natural harmony of interests. Maintain
external order, suppress violence, assure men
in the possession of their property, and enforce
the fulfilment of contracts, and the rest will go

THE MOVEMENT OF THEORY 59

of itself. Each man will be guided by self-
interest, but interest will lead him along the
lines of greatest productivity. If all artificial
barriers are removed, he will find the occupa-
tion which best suits his capacities, and this
will be the occupation in which he will be
most productive, and therefore, socially, most
valuable. He will have to sell his goods to
a willing purchaser, therefore he must devote
himself to the production of things which
others need, things, therefore, of social value.
He will, by preference., make that for which he
can obtain the highest price, and this will be
that for which, at the particular time and
place and in relation to his particular capaci-
ties, there is the greatest need. He will, again,
find the employer who will pay him best, and
that will be the employer to whom he can do
the best service. Self-interest, if enlightened
and unfettered, will, in short, lead him to con-
duct coincident with public interest. There is,
in this sense, a natural harmony between the
individual and society. True, this harmony
might require a certain amount of education
and enlightenment to make it effective. What
it did not require was governmental " inter-
ference," which would always hamper the

60 LIBERALISM

causes making for its smooth and effectual
operation. Government must keep the ring,
and leave it for individuals to play out the
game. The theory of the natural rights of the
individual is thus supplemented by a theory
of the mutual harmony of individual and
social needs, and, so completed, forms a con-
ception of human society which is primd facie
workable, which, in fact, contains important
elements of truth, and which was responsive
to the needs of a great class, and to many of
the requirements of society as a whole, during
a considerable period.

On both sides, however, the theory exhibits,
under criticism, fundamental weaknesses
which have both a historical and a speculative
significance. Let us first consider the con-
ception of natural rights. What were these
rights, and on what did they rest ? On the
first point men sought to be explicit. By way
of illustration we cannot do better than quote
the leading clauses of the Declaration of
1789.1

^ The comparison of the Declaration of the Assembly in
1789 with that of the Convention in 1793 is full of interest,
both for the points of agreement and difference, but would
require a lengthy examination. I note one or two points
in passing.

THE MOVEMENT OF THEORY 61

Article I. — Men are born and remain free
and equal in rights. Social distinctions can
only be founded on common utility.

Article II. — The end of every political
association is the conservation of the natural
and imprescriptible rights of man.^ These
rights are liberty, property, security {la
surete), and resistance to oppression.

Article III. — The principle of all sovereignty
resides essentially in the nation. . . .

Article IV. — Liberty consists in the power
to do anything that does not injure others;
thus, the exercise of the natural rights of every
man has only such limits as assure to other
members of society the enjoyment of the same
rights. These hmits can only be determined
by law.

Article VI. — The law is the expression of
the general will. All citizens have a right to
take part (concourir), personally or by their
representatives, in its formation.

The remainder of this article insists on the
impartiality of law and the equal admission
of all citizens to office. The Declaration of

1 Contrast 1793, Art. I : " The end of society is the
common happiness. Government is instituted to ji^uarantee
to man the enjoyment of his natural and inii»rescriptible
rights."

62 LIBERALISM

1793 is more emphatic about equality, and
more rhetorical. Article III reads, " All men
are equal by nature and before the law."

It is easy to subject these articles to a
niggling form of criticism in which their spirit
is altogether missed. I would ask attention
only to one or two points of principle.

(a) What are the rights actually claimed ?
" Security " and " resistance to oppression " are
not in principle distinct, and, moreover, may be
taken as covered by the definition of liberty.
The meaning at bottom is " Security for liberty
in respect of his person and property is the
right of every man." So expressed, it will be
seen that this right postulates the existence
of an ordered society, and lays down that it
is the duty of such a society to secure the
liberty of its members. The right of the
individual, then, is not something independent
of society, but one of the principles which a
good social order must recognize.

(6) Observe that equality is limited by the
" common utility," and that the sphere of
hberty is ultimately to be defined by " law."
In both cases we are referred back from the
individual either to the needs or to the decision
of society as a whole. There are, moreover.

THE MOVEMENT OF THEORY 63

two definitions of liberty. (1) It is the power
to do what does not injure others. (2) It is
a right Hmited by the consideration that
others must enjoy the same rights. It is
important to bear in mind that these two
definitions are highly discrepant. If my right
to knock a man down is only limited by his
equal right to knock me down, the law has no
business to interfere when we take to our fists.
If, on the other hand, I have no right to injure
another, the law should interfere. Very little
reflection suffices to show that this is the
sounder principle, and that respect for the
equal liberty of another is not an adequate
definition of liberty. My right to keep my
neighbour awake by playing the piano all
night is not satisfactorily counterbalanced by
his right to keep a dog which howls all the time
the piano is being played. The right of a
" sweater " to pay starvation wages is not
satisfactorily limited by the corresponding
right which his employee would enjoy if he
were in a position to impose the same terms on
some one else. Generally, the right to injure
or take advantage of another is not sufficiently
limited by the right of that other if he should
have the poM-^er to retaliate in kind. There is

64 LIBERALISM

no right to injure another; and if we ask what
is injury we are again thrown back on some
general principle which will override the indi-
vidual claim to do what one will.

(c) The doctrine of popular sovereignty
rests on two principles. (1) It is said to
reside in the nation. Law is the expression
of the general will. Here the " nation " is
conceived as a collective whole, as a unit.
(2) Every citizen has the right to take part in
making the law. Here the question is one of
individual right. Which is the real ground
of democratic representation — the unity of
the national life, or the inherent right of the
individual to be consulted about that which
concerns himself ?

Further, and this is a very serious question,
which is the ultimate authority — the will of
the nation, or the rights of the individual ?
Suppose the nation deliberately decides on
laws which deny the rights of the individual,
ought such laws to be obeyed in the name
of popular sovereignty, or to be disobeyed in
the name of natural rights ? It is a real
issue, and on these lines it is unfortunately
quite insoluble.

These difficulties were among the con-

THE MOVEMENT OF THEORY 65

siderations which led to the formation of the
second type of Liberal theory, and what has
to be said about the harmony of the natural
order may be taken in conjunction with this
second theory to which we may now pass,
and which is famous as The Greatest Happi-
ness Principle.

Bentham, who spent the greater part of his
life in elaborating the greatest happiness
principle as a basis of social reconstruction,
was fully alive to the difficulties which we
have found in the theory of natural rights.
The alleged rights of man were for him so
many anarchical fallacies. They were founded
on no clearly assignable principle, and ad-
mitted of no demonstration. " I say I have
a right." " I say you have no such right."
Between the disputants who or what is to
decide ? What was the supposed law of
nature ? When was it written, and by whose
authority ? On what ground do we maintain
that men are free or equal ? On what
principle and within what limits do we or
can we maintain the right of property ?
There were points on which, by universal
admission, all these rights have to give way.
What is the right of property worth in times

66 LIBERALISM

of war or of any overwhelming general need ?
The Declaration itself recognized the need of
appeal to common utility or to the law to
define the limits of individual right, Bentham
would frankly make all rights dependent on
common utility, and therewith he would make
it possible to examine all conflicting claims in
the light of a general principle. He would
measure them all by a common standard.
Has a man the right to express his opinion
freely ? To determine the question on Ben-
tham's lines we must ask whether it is, on the
whole, useful to society that the free expression
of opinion should be allowed, and this, he
would say, is a question which may be decided
by general reasoning and by experience of re-
sults. Of course, we must take the rough with
the smooth. If the free expression of opinion
is allowed, false opinion will find utterance
and will mislead many. The question would
be, does the loss involved in the promulgation
of error counterbalance the gain to be derived
from unfettered discussion? and Bentham
would hold himself free to judge by results.
Should the State maintain the rights of private
property ? Yes, if the admission of those
rights is useful to the community as a whole.

THE MOVEMENT OF THEORY 67

No, if it is not useful. Some rights of pro-
perty, again, may be advantageous, others dis-
advantageous. The community is free to make
a selection. If it finds that certain forms of
property are working to the exclusive benefit
of individuals and the prejudice of the common
weal, it has good ground for the suppression
of those forms of property, while it may, with
equal justice, maintain other forms of property
which it holds sound as judged by the effect
on the common welfare. It is limited by no
" imprescriptible " right of the individual.
It may do with the individual what it pleases
provided that it has the good of the whole
in view. So far as the question of right is
concerned the Benthamite principle might
be regarded as decidedly socialistic or even
authoritarian. It contemplates, at least as
a possibility, the complete subordination of
individual to social claims.

There is, however, another side to the
Benthamite principle, to understand which
we must state the heads of the theory itself
as a positive doctrine. What is this social
utility of which we have spoken ? In what
does it consist ? What is useful to society,
and what harmful ? The answer has the

68 LIBERALISM

merit of great clearness and simplicity. An
action is good which tends to promote the
greatest possible happiness of the greatest
possible number of those affected by it. As
with an action, so, of course, with an institution
or a social system. That is useful which con-
forms to this principle. That is harmful which
conflicts with it. That is right which conforms
to it, that is wrong which conflicts with it. The
greatest happiness principle is the one and
supreme principle of conduct. Observe that
it imposes on us two considerations. One is
the greatest happiness. Now happiness is
defined as consisting positively in the presence
of pleasure, negatively in the absence of pain.
A greater pleasure is then preferable to a lesser,
a pleasure unaccompanied by pain to one
involving pain. Conceiving pain as a minus
quantity of pleasure, we may say that the prin-
ciple requires us always to take quantity and
pleasure into account, and nothing else. But,
secondly, the number of individuals affected
is material. An act might cause pleasure to
one and pain to two. Then it is wrong, unless,
indeed, the pleasure were very great and the
pain in each case small. We must balance
the consequences, taking all individuals

s

THE MOVEMENT OF THEORY 69

affected into account, and "everybody must
count for one and nobody for more than one."
This comment is an integral part of the
original formula. As between the happiness
of his father, his child, or himself, and the
happiness of a stranger, a man must be im-
partial. He must only consider the quantity
of pleasure secured or pain inflicted.

Now, in this conception of measurable
quantities of pleasure and pain there is, as
many critics have insisted, something unreal
and academic. We shall have to return to
the point, but let us first endeavour to under-
stand the bearing of Bentham's teaching on
the problems of his own time and on the subse-
quent development of Liberal thought. For
this purpose we will keep to what is real in
his doctrine, even if it is not always defined
with academic precision. The salient points
that we note, then, are (1) the subordination
of all considerations of right to the considera-
tions of happiness, (2) the importance of
number, and (3) as the other side of the same
doctrine, the insistence on equality or im-
partiality between man and man. The
common utility which Bentham considers is
the happiness experienced by a number of

70 LIBERALISM

individuals, all of whom are reckoned for
this purpose as of equal value. This is the
radical individualism of the Benthamite creed,
to be set against that socialistic tendency
which struck us in our preliminary account.

In this individualism, equality is funda-
mental. Everybody is to count for one,
nobody for more than one, for every one can
feel pain and pleasure. Liberty, on the other
hand, is not fundamental, it is a means to an
end. Popular sovereignty is not fundamental,
for all government is a means to an end.
Nevertheless, the school of Bentham, upon the
whole, stood by both liberty and democracy.
Let us consider their attitude.

As to popular government, Bentham and
James Mill reasoned after this fashion. Men,
if left to themselves, that is to say, if neither
trained by an educational discipline nor
checked by responsibility, do not consider the
good of the greatest number. They consider
their own good. A king, if his power is un-
checked, will rule in his own interest. A class,
if its power is unchecked, will rule in its own
interest. The only way to secure fair con-
sideration for the happiness of all is to allow
to all an equal share of power. True, if there

THE MOVEMENT OF THEORY 71

is a conflict the majority will prevail, but they
will be moved each by consideration of his own
happiness, and the majority as a whole, there-
fore, by the happiness of the greater number.
There is no inherent right in the individual
to take a part in government. There is a
claim to be considered in the distribution of
the means of happiness, and to share in the
work of government as a means to this end.
It would follow, among other things, that if
one man or one class could be shown to be so
much wiser and better than others that his
or their rule would, in fact, conduce more to
the happiness of the greater number than a
popular system, then the business of govern-
ment ought to be entrusted to that man or
that class and no one else ought to interfere
with it.

The whole argument, however, implies a
crude view of the problem of government.
It is, of course, theoretically possible that a
question should present itself, detached from
other questions, in which a definite measurable
interest of each of the seven millions or more
of voters is at stake. For example, the great
majority of Enghsh people drink tea. Com-
paratively few drink wine. Should a particular

72 LIBERALISM

sum be raised by a duty on tea or on wine ?
Here the majority of tea-drinkers have a
measurable interest, the same in kind and
roughly the same in degree for each; and the
vote of the majority, if it could be taken on
this question alone and based on self-interest
alone, might be conceived without absurdity
as representing a sum of individual interests.
Even here, however, observe that, though the
greatest number is considered, the greatest
happiness does not fare so well. For to raise
the same sum the tax on wine will, as less
is drunk, have to be much larger than the
tax on tea, so that a little gain to many tea-
drinkers might inflict a heavy loss on the few
wine-drinkers, and on the Benthamite principle
it is not clear that this would be just. In
point of fact it is possible for a majority to act
tyrannically, by insisting on a slight con-
venience to itself at the expense, perhaps, of
real suffering to a minority. Now the Utih-
tarian principle by no means justifies such
tyranny, but it does seem to contemplate the
weighing of one man's loss against another's
gain, and such a method of balancing does not
at bottom commend itself to our sense of jus-
tice. We may lay down that if there is a

THE MOVEMENT OF THEORY 73

rational social order at all it must be one
which never rests the essential indispensable
condition of the happiness of one man on the
unavoidable misery of another, nor the happi-
ness of forty millions of men on the misery
of one. It may be temporarily expedient, but
it is eternally unjust, that one man should
die for the people.

We may go further. The case of the
contemplated tax is, as applied to the politics
of a modern State, an unreal one. Political
questions cannot be thus isolated. Even if
we could vote by referendum on a special tax,
the question which voters would have to
consider would never be the revenue from and
the incidence of that tax alone. All the
indirect social and economic bearings of the
tax would come up for consideration, and in
the illustration chosen people would be swayed,
and rightly swayed, by their opinion, for
example, of the comparative effects of tea-
drinking and wine-drinking. No one element
of the social life stands separate from the rest,
any more than any one element of the animal
body stands separate from the rest. Iii
this sense the life of society is rightly held to
be organic, and all considered public policy

Cy 2

74 LIBERALISM

must be conceived in its bearing on the life
of society as a whole. But the moment that
we apply this view to politics, the Benthamite
mode of stating the case for democracy is
seen to be insufficient. The interests of every
man are no doubt in the end bound up with
the welfare of the whole community, but the
relation is infinitely subtle and indirect. More-
over, it takes time to work itself out, and the
evil that is done in the present day may only
bear fruit when the generation that has done
it has passed away. Thus, the direct and
calculable benefit of the majority may by no
means coincide with the ultimate good of
society as a whole; and to suppose that the
majority must, on grounds of self-interest,
govern in the interests of the community as
a whole is in reality to attribute to the
mass of men full insight into problems which
tax the highest efforts of science and of
statesmanship. Lastly, to suppose that men
are governed entirely by a sense of their
interests is a many-sided fallacy. Men are
neither so intelligent nor so selfish. They are
swayed by emotion and by impulse, and both
for good and for evil they will lend enthusiastic
support to courses of public policy from which,

THE MOVEMENT OF THEORY 75

as individuals, they have nothing to gain. To
understand the real value of democratic
government, we shall have to probe far deeper
into the relations of the individual and
society.

I turn lastly to the question of liberty. On
Benthamite principles there could be no ques-
tion here of indefeasible individual right.
There were even, as we saw, possibilities of a
thorough-going Socialism or of an authorita-
rian paternalism in the Benthamite principle.
But two great considerations told in the oppo-
site direction. One arose from the circum-
stances of the day. Bentham, originally a
man of somewhat conservative temper, was
driven into Radicalism comparatively late in
life by the indifference or hostility of the
governing classes to his schemes of reform.
Government, as he saw it, was of the nature
of a close corporation with a vested interest
hostile to the public weal, and his work is
penetrated by distrust of power as such. There
was much in the history of the time to justify
his attitude. It was difficult at that time to
believe in an honest officialdom putting the
commonwealth above every personal or cor-
porate interest, and reformers naturally looked

76 LIBERALISM

to individual initiative as the source of pro-
gress. Secondly, and this was a more philo-
sophic argument, the individual was supposed
to understand his own interest best, and as
the common good was the sum of individual
interests, it followed that so far as every man
was free to seek his own good, the good of
the greatest number would be most effect-
ually realized by general freedom of choice.
That there were difficulties in reconciling
self-interest with the general good was not
denied. But men like James Mill, who
especially worked at this side of the problem,
held that they could be overcome by moral
education. Trained from childhood to asso-
ciate the good of others with his own, a man
would come, he thought, to care for the hap-
piness of others as for the happiness of self.
For, in the long run, the two things were
coincident. Particularly in a free economic
system, as remarked above, each individual,
moving along the line of greatest personal
profit, would be found to fulfil the function
of greatest profit to society. Let this be
understood, and we should have true social
harmony based on the spontaneous operation
of personal interest enlightened by intelligence

THE MOVEMENT OF THEORY 77

and chastened by the discipline of unruly
instinct.

Thus, though their starting-point was dif-
ferent, the Benthamites arrived at practical
results not notably divergent from those of the
doctrine of natural liberty; and, on the whole,
the two influences worked together in the
formation of that school who in the reform
period exercised so notable an influence on
English Liberalism, and to whose work we
must now turn.

CHAPTER IV

* LAISSEZ-FAIRE '

The school of Cobden is affiliated in general
outlook both to the doctrine of natural liberty
and to the discipline of Bentham. It shared
with the Benthamites the thoroughly practical
attitude dear to the English mind. It has
much less to say of natural rights than the
French theorists. On the other hand, it is
saturated with the conviction that the un-
fettered action of the individual is the main-
spring of all progress.^ Its starting-point is
economic. Trade is still in fetters. The
worst of the archaic internal restrictions have,

^ " If I were asked to sum up in a sentence the differ-
ence and the connection (between the two schools) I would
say that the Manchester men were the disciples of Adam
Smith and Bentham, while the Philosophical Radicals
followed Bentham and Adam Smith " (F. W. Hirst, The
Manchester School, In trod., p. xi). Lord Morley, in the
concluding chapter of his Life of Cohden, points out that
it was the view of " policy as a whole " in connection with
the economic movement of society which distinguished
the school of Cobden from that of the Benthamites.

73

* LAISSEZ-FAIRE ' 79

indeed, been thrown off. But even here Cobden
is active in the work of finally emancipating
Manchester from manorial rights that have no
place in the nineteenth century. The main
work, however, is the liberation of foreign
trade. The Corn Laws, as even the tariff
reformers of our own day admit, were con-
ceived in the interest of the governing classes.
They frankly imposed a tax on the food of the
masses for the benefit of the landlords, and as
the result of the agricultural and industrial
revolutions which had been in progress since
1760, the masses had been brought to the
lowest point of economic misery. Give to
every man the right to buy in the cheapest
and sell in the dearest market, urged the
Cobdenite, and trade would automatically
expand. The business career would be open
to the talents. The good workman would
command the full money's worth of his
work, and his money would buy him food
and clothing at the lowest rate in the
world's market. Only so would he get the
full value of his work, paying toll to none.
Taxes there must be to carry on government,
but if we looked into the cost of government
we found that it depended mostly on arma-

80 LIBERALISM

ments. Why did we need armaments ? First,
because of the national antagonisms aroused
and maintained by a protective system. Free
commercial intercourse between nations would
engender mutual knowledge, and knit the
severed peoples by countless ties of business
interests. Free Trade meant peace, and once
taught by the example of Great Britain's pros-
perity, other nations would follow suit, and
Free Trade would be universal. The other
root of national danger was the principle of
intervention. We took it on ourselves to set
other nations right. How could we judge for
other nations ? Force was no remedy. Let
every people be free to work out its own sal-
vation. Things were not so perfect with us
that we need go about setting the houses of
other people in order. To complete personal
freedom, there must be national freedom. There
must also be colonial freedom. The colonies
could no longer be governed in the interests of
the mother country, nor ought they to require
standing garrisons maintained by the mother
country. They were distant lands, each, if
we gave it freedom, with a great future of its
own, capable of protecting itself, and develop-
ing with freedom into true nationhood.

' LAISSEZ-FAIRE * 81

Personal freedom, colonial freedom, inter-
national freedom, were parts of one whole.
Non-intervention, peace, restriction of arma-
ments, retrenchment of expenditure, reduction
of taxation, were the connected series of prac-
tical consequences. The money retrenched
from wasteful military expenditure need not
all be remitted to the taxpayer. A fraction
of it devoted to education — free, secular, and
universal — would do as much good as when
spent on guns and ships it did harm. For
education was necessary to raise the standard
of intelligence, and provide the substantial
equality of opportunity at the start without
which the mass of men could not make use of
the freedom given by the removal of legislative
restrictions. There were here elements of a
more constructive view for which Cobden and
his friends have not always received sufficient
credit.

In the main, however, the teaching of the
Manchester school • tended both in external
and in internal affairs to a restricted view of
the function of government. Government had
to maintain order, to restrain men from violence
and fraud, to hold them secure in person and
property against foreign and domestic enemies,

82 LIBERALISM

to give them redress against injury, that
so they may rely on reaping where they have
sown, may enjoy the fruits of their industry,
may enter unimpeded into what arrangements
they will with one another for their mutual
benefit. Let us see what criticism was passed
on this view by the contemporaries of Cobden
and by the loud voice of the facts themselves.
The old economic regime had been in decay
throughout the eighteenth century. The
divorce of the labourer from the land was
complete at the time when the Anti-Corn
Law League was formed. The mass of the
English peasantry were landless labourers
working for a weekly wage of about ten or
twelve shillings, and often for a good deal less.
The rise of machine industry since 1760
had destroyed the old domestic system and
reduced the operative in the towns to the
position of a factory hand under an employer,
who found the road to wealth easy in the
monopoly of manufacture enjoyed by this
country for two generations after the Napo-
leonic war. The factory system early
brought matters to a head at one point by
the systematic employment of women and
young children under conditions which out-

' LAISSEZ-FAIRE ' 83

raged the public conscience when they be-
came known. In the case of children it was
admitted from an early date, it was urged
by Cobden himself, that the principle of
free contract could not apply. Admitting,
for the sake of argument, that the adult
could make a better bargain for himself
or herself than any one could do for him or
her, no one could contend that the pauper
child apprenticed by Poor Law guardians to
a manufacturer had any say or could have
any judgment as to the work which it was set
to do. It had to be protected, and experi-
ence showed that it had to be protected by law.
Free contract did not solve the question of
the helpless child. It left it to be " exploited"
by the employer in his own interest, and what-
ever regard might be shown for its health
and well-being by individuals was a matter
of individual benevolence, not a right secured
by the necessary operation of the system of
liberty.

But these arguments admitted of great
extension. If the child was helpless, was
the grown-up person, man or woman, in
a much better position ? Here was the
owner of a mill employing five hundred

84 LIBERALISM

hands. Here was an operative possessed of
no alternative means of subsistence seeking
employment. Suppose them to bargain as
to terms. If the bargain failed, the employer
lost one man and had four hundred and ninety-
nine to keep his mill going. At worst he
might for a day or two, until another operative
appeared, have a little difficulty in working
a single machine. During the same days the
operative might have nothing to eat, and
might see his children going hungry. Where
was the effective liberty in such an arrange-
ment ? The operatives themselves speedily
found that there was none, and had from an
early period in the rise of the machine in-
dustry sought to redress the balance by com-
bination. Now, combination was naturally
disliked by employers, and it was strongly
suspect to believers in liberty because it
put constraint upon individuals. Yet trade
unions gained the first step in emancipation
through the action of Place and the Radicals
in 1824, more perhaps because these men con-
ceived trade unions as the response of labour
to oppressive laws which true freedom of
competition would render superfluous than
because they founded any serious hopes of

* LAISSEZ-FAIRE ' 85

permanent social progress upon Trade Union-
ism itself. In point of fact, the critical
attitude was not without its justification.
Trade Unionism can be protective in spirit
and oppressive in action. Nevertheless, it
was essential to the maintenance of their
industrial standard by the artisan classes,
because it alone, in the absence of drastic
legislative protection, could do something
to redress the inequality between employer
and employed. It gave, upon the whole, far
more freedom to the workman than it took
away, and in this we learn an important
lesson which has far wider application. In
the matter of contract true freedom postulates
substantial equality between the parties. In
proportion as one party is in a position of
vantage, he is able to dictate his terms.
In proportion as the other party is in a weak
position, he must accept unfavourable terms.
Hence the truth of Walker's dictum that
economic injuries tend to perpetuate them-
selves. The more a class is brought low, the
greater its difificulty in rising again without
assistance. For purposes of legislation the
State has been exceedingly slow to accept this
view. It began, as we saw, with the child.

86 LIBERALISM

where the case was overwhelming. It went
on to include the " young person " and the
woman — not without criticism from those
who held by woman's rights, and saw in this
extension of tutelage an enlargement of
male domination. Be that as it may, public
opinion was brought to this point by the
belief that it was intervening in an exceptional
manner to protect a definite class not strong
enough to bargain for itself. It drew the line
at the adult male; and it is only within our
own time, and as the result of a controversy
waged for many years within the trade union
world itself, that legislation has avowedly
undertaken the task of controlling the con-
ditions of industry, the hours, and at length,
through the institution of Wages Boards in
" sweated industries," the actual remuneration
of working people without limitation of age
or sex. To this it has been driven by the
manifest teaching of experience that liberty
without equality is a name of noble sound
and squalid result.

In place of the system of unfettered agree-
ments between individual and individual
which the school of Cobden contemplated, the
industrial system which has actually grown

* LAISSEZ-FAIRE ' 87

up and is in process of further development
rests on conditions prescribed by the State,
and within the Hmits of those conditions is
very largely governed by collective arrange-
ments between associations of employers and
employed. The law provides for the safety
of the worker and the sanitary conditions of
employment. It prescribes the length of the
working day for women and children in
factories and workshops, and for men in mines
and on railways.^ In the future it will
probably deal freely with the hours of men.
It enables wages boards to establish a legal
minimum wage in scheduled industries which
will undoubtedly grow in number. It makes
employers liable for all injuries suffered by
operatives in the course of their employment,
and forbids any one to " contract out " of this
obligation. Within these limits, it allows
freedom of contract. But at this point, in the
more highly developed trades, the work is
taken up by voluntary associations. Com-
binations of men have been met by combina-
tions of employers, and wages, hours, and all

^ Indirectly it has for long limited the hours of men in
factories owing to the interdependence of the adult male
with the female and child operative.

88 LIBERALISM

the details of the industrial bargain are settled
by collective agreement through the agency of
a joint board with an impartial chairman or
referee in case of necessity for an entire locality
and even an entire trade. So far have we
gone from the free competition of isolated
individuals.

This development is sometimes held to
have involved the decay and death of the older
Liberalism. It is true that in the beginning
factory legislation enjoyed a large measure of
Conservative support. It was at that stage in
accordance with the best traditions of paternal
rule, and it commended itself to the religious
convictions of men of whom Lord Shaftesbury
was the typical example. It is true, also,
that it was bitterly opposed by Cobden and
Bright. On the other hand, Radicals like
J. Cam Hobhouse took a leading part in the
earlier legislation, and Whig Governments
passed the very important Acts of 1833 and
1847. The cleavage of opinion, in fact, cut
across the ordinary divisions of party. What
is more to the purpose is that, as experience
ripened, the implications of the new legisla-
tion became clearer, and men came to see that
by industrial control they were not destroying

' LAISSEZ-FAIRE ' 89

liberty but confirming it. A new and more
concrete conception of liberty arose and many
old presuppositions were challenged.

Let us look for a moment at these pre-
suppositions. We have seen that the theory
of laissez-faire assumed that the State would
hold the ring. That is to say, it would suppress
force and fraud, keep property safe, and aid men
in enforcing contracts. On these conditions,
it was maintained, men should be absolutely
free to compete with one another, so that
their best energies should be called forth, so
that each should feel himself responsible for
the guidance of his own life, and exert his
manhood to the utmost. But why, it might
be asked, on these conditions, just these and
no others ? Why should the State ensure
protection of person and property ? The
time was when the strong man armed kept
his goods, and incidentally his neighbour's
goods too if he could get hold of them. Why
should the State intervene to do for a man
that which his ancestor did for himself ? Why
should a man who has been soundly beaten in
physical fight go to a public authority for re-
dress ? How much more manly to fight his own
battle I Was it not a kind of pauperization

90 LIBERALISM

to make men secure in person and property-
through no efforts of their own, by the agency
of a state machinery operating over their
heads ? Would not a really consistent indi-
vidualism abolish this machinery ? " But,"
the advocate of laissez-faire may reply, " the
use of force is criminal, and the State must
suppress crime." So men held in the nine-
teenth century. But there was an earlier time
when they did not take this view, but left it
to individuals and their kinsfolk to revenge
their own injuries by their own might. Was
not this a time of more unrestricted indi-
vidual liberty ? Yet the nineteenth century
regarded it, and justly, as an age of barbarism.
What, we may ask in our turn, is the essence
of crime ? May we not say that any intentional
injury to another may be legitimately punished
by a public authority, and may we not say
that to impose twelve hours' daily labour on
a child was to inflict a greater injury than the
theft of a purse for which a century ago a man
might be hanged ? On what principle, then,
is the line drawn, so as to specify certain
injuries which the State may prohibit and to
mark off others which it must leave untouched?
Well, it may be said, volenti non fit injuria.

* LAISSEZ-FAIRE * 91

No wrong is done to a man by a bargain to
which he is a willing party. That may be,
though there are doubtful cases. But in the
field that has been in question the contention
is that one party is not willing. The bargain
is a forced bargain. The weaker man consents
as one slipping over a precipice might consent
to give all his fortune to one who will throw
him a rope on no other terms. This is not true
consent. True consent is free consent, and
full freedom of consent implies equality on the
part of both parties to the bargain. Just as
government first secured the elements of free-
dom for all when it prevented the physically
stronger man from slaying, beating, despoiling
his neighbours, so it secures a larger measure
of freedom for all by every restriction which
it imposes with a view to preventing one man
from making use of any of his advantages
to the disadvantage of others.

There emerges a distinction between un-
social and social freedom. Unsocial freedom
is the right of a man to use his powers
without regard to the wishes or interests of
any one but himself. Such freedom is
theoretically possible for an individual. It
is antithetic to all public control. It is

92 LIBERALISM

theoretically impossible for a plurality of in-
dividuals living in mutual contact. Socially
it is a contradiction, unless the desires of all
men were automatically attuned to social
ends. Social freedom, then, for any epoch
short of the millennium rests on restraint. It
is a freedom that can be enjoyed by all the
members of a community, and it is the free-
dom to choose among those lines of activity
which do not involve injury to others. As
experience of the social effects of action ripens,
and as the social conscience is awakened, the
conception of injury is widened and insight
into its causes is deepened. The area of
restraint is therefore increased. But, inas-
much as injury inflicted is itself crippling to
the sufferer, as it lowers his health, confines
his life, cramps his powers, so the prevention
of such injury sets him free. The restraint of
the aggressor is the freedom of the sufferer,
and only by restraint on the actions by which
men injure one another do they as a whole
community gain freedom in all courses of
conduct that can be pursued without ultimate
social disharmony.

It is, therefore, a very shallow wit that taunts
contemporary Liberalism with inconsistency

LAISSEZ-FAIRE ' 93

in opposing economic protection while it
supports protective legislation for the manual
labourer. The two things have nothing in
common but that they are restraints intended
to operate in the interests of somebody. The
one is a restraint which, in the Liberal view,
would operate in favour of certain industries
and interests to the prejudice of others, and,
on the whole, in favour of those who are
already more fortunately placed and against
the poorer classes. The other is a restraint
conceived in the interest primarily of the
poorer classes with the object of securing to
them a more effective freedom and a nearer
approach to equality of conditions in indus-
trial relations. There is point in the argument
only for those who conceive liberty as opposed
to restraint as such. For those who under-
standthat all social liberty rests upon restraint,
that restraint of one man in one respect is
the condition of the freedom of other men
in that respect, the taunt has no meaning what-
ever. The liberty which is good is not the
liberty of one gained at the expense of others,
but the liberty which can be enjoyed by all
who dwell together, and this liberty depends
on and is measured by the completeness with

94 LIBERALISM

which by law, custom, or their own feeUngs
they are restrained from mutual injury.

Individualism, as ordinarily understood,
not only takes the policeman and the law
court for granted. It also takes the rights of
property for granted. But what is meant by
the rights of property ? In ordinary use the
phrase means just that system to which long
usage has accustomed us. This is a system
under which a man is free to acquire by any
method of production or exchange within
the limits of the law whatever he can of land,
consumable goods, or capital ; to dispose of it
at his own will and pleasure for his own pur-
poses, to destroy it if he likes, to give it away
or sell it as it suits him, and at death to be-
queath it to whomsoever he will. The State,
it is admitted, can take a part of a man's
property by taxation. For the State is a
necessity, and men must pay a price for
security; but in all taxation the State on
this view is taking something from a man
which is " his," and in so doing is justified
only by necessity. It has no " right " to
deprive the individual of anything that is
his in order to promote objects of its own
which are not necessary to the common order.

' LAISSEZ-FAIRE ' 95

To do so is to infringe individual rights and
make a man contribute by force to objects
which he may view with indifference or even
with dislike. " Socialistic " taxation is an
infringement of individual freedom, the free-
dom to hold one's own and do as one will
with one's own. Such seems to be the ordi-
nary view.

But a consistent theory of liberty could not
rest wholly satisfied with the actual system
under which property is held. The first point
of attack, already pressed by the disciples
of Cobden, was the barrier to free exchange
in the matter of land. It was not and still
is not easy for the landless to acquire land,
and in the name of free contract Cobden and
his disciples pressed for cheap and unimpeded
transfer. But a more searching criticism
was possible. Land is limited in amount,
certain kinds of land very narrowly limited.
Where there is limitation of supply monopoly
is always possible, and against monopoly the
principles of free competition declared war.
To Cobden himself, free trade in land was the
pendant to free trade in goods. But the
attack on the land monopoly could be carried
much further, and might lead the individualist

96 LIBERALISM

who was in earnest about his principles to
march a certain distance on parallel lines
with the Socialist enemy. This has, in fact,
occurred in the school of Henry George.
This school holds by competition, but by
competition only on the basis of a genuine
freedom and equality for all individuals. To
secure this basis, it would purge the social
system of all elements of monopoly, of which
the private ownership of land is in its view the
most important. This object, it maintains,
can be secured only through the absorption
by the State of all elements of monopoly value.
Now, monopoly value accrues whenever any-
thing of worth to men of which the supply
is limited falls into private hands. In this
case competition fails. There is no check upon
the owner except the limitations of demand.
He can exact a price which bears no necessary
relation to the cost of any effort of his own.
In addition to normal wages and profits, he
can extract from the necessities of others a
surplus, to which the name of economic rent
is given. He can also hold up his property
and refuse to allow others to make use of it
until the time when its full value has accrued,
thereby increasing the rent which he will

* LAISSEZ-FAIRE ' 97

ultimately receive at the cost of much loss in
the interim to society.

Monopolies in our country fall into three
classes. There is, first, the monopoly of land.
Urban rents, for example, represent not merely
the cost of building, nor the cost of building
plus the site, as it would be if sites of the
kind required were unlimited in amount.
They represent the cost of a site where the
supply falls short of the demand, that is to
say, where there is an element of monopoly.
And site value — the element in the actual
cost- of a house or factory that depends on
its position — varies directly with the degree of
this monopoly. This value the land national-
izer contends is not created by the owner. It
is created by society. In part it is due to the
general growth of the country to which the
increase of population and the rise of town life
is to be attributed. In part it depends on the
growth of the particular locality, and in part
on the direct expenditure of the ratepayers'
money in sanitation and other improvements
which make the place one where people
can live and industry can thrive. Directly
and indirectly, the community creates the
site value. The landlord recefves it, and,

D

98 LIBERALISM

receiving it, can charge any one who wants to
Hve or carry on industry upon the site with
rent to the full amount. The land-national-
izer, looking at rights of property purely from
the point of view of the individual, denies
the justice of this arrangement, and he sees
no solution except this — that the monopoly
value should pass back to the community
Avhich creates it. Accordingly, he favours the
taxation of site value to its full amount.
Another element of monopoly arises from
industries in which competition is inapplicable
— the supply of gas and water, for example,
a tramway service, and in some conditions a
railway service. Here competition may be
wasteful if not altogether impossible; and
here again, on the lines of a strictly consistent
individualism, if the industry is allowed to fall
into private hands the owners will be able to
secure something more than the normal profits
of competitive industry. They will profit
by monopoly at the expense of the general
consumer, and the remedy is public control
or public ownership. The latter is the more
complete and efficacious remedy, and it is also
the remedy of municipal socialism. Lastly,
there may be forms of monopoly created by

' LAISSEZ-FAIRE ' 99

the State, such as the sale of liquor as restricted
by the licensing system. In accordance with
competitive ideas the value so created ought
not to pass into private hands, and if on social
grounds the monopoly is maintained, the
taxation of licensed premises ought to be so'
arranged that the monopoly value returns to
the community.

Up to this point a thoroughly consistent
individualism can work in harmony with
socialism, and it is this partial alliance which
has, in fact, laid down the lines of later Liberal
finance. The great Budget of 1909 had be-
hind it the united forces of Socialist and
individualist opinion. It may be added that
there is a fourth form of monopoly which
would be open to the same double attack, but
it is one of which less has been heard in Great
Britain than in the United States. It is
possible under a competitive system for rivals
to come to an agreement. The more power-
ful may coerce the weaker, or a number of
equals may agree to work together. Thus
competition may defeat itself, and industry
may be marshalled into trusts or other com-
binations for the private advantage against
the public interest. Such combinations,

100 LIBERALISM

predicted by Karl Marx as the appointed
means of dissolving the competitive system,
have been kept at bay in this country by
Free Trade. Under Protection they con-
stitute the most urgent problem of the day.
Even here the railways, to take one example,
are rapidly moving to a system of combina-
tion, the economies of which are obvious,
while its immediate result is monopoly, and
its assured end is nationalization.

Thus individualism, when it grapples with
the facts, is driven no small distance along
Socialist lines. Once again we have found
that to maintain individual freedom and
equality we have to extend the sphere of
social control. But to carry through the
real principles of Liberalism, to achieve social
liberty and living equality of rights, we
shall have to probe still deeper. We must
not assume any of the rights of property
as axiomatic. We must look at their actual
working and consider how they affect the life
of society. We shall have to ask whether, if
we could abolish all monopoly on articles of
limited supply, we should yet have dealt with
all the causes that contribute to social injustice
and industrial disorder, whether we should

* LAISSEZ-FAIRE ' 101

have rescued the sweated worker, afforded to
every man adequate security for a fair return
for an honest day's toil, and prevented the use
of economic advantage to procure gain for one
man at the expense of another. We should
have to ask whether we had the basis of a
just delimitation between the rights of the
community and those of the individual, and
therewith a due appreciation of the appro-
priate ends of the State and the equitable
basis of taxation. These inquiries take us to
first principles, and to approach that part
of our discussion it is desirable to carry
further our sketch of the historic development
of Liberalism in thought and action.

CHAPTER V

GLADSTONE AND MILL

From the middle of the nineteenth century
two great names stand out in the history of
British Liberahsm — that of Gladstone in the
world of action, that of Mill in the world of
thought. Differing in much, they agreed in
one respect. They had the supreme virtue
of keeping their minds fresh and open to
new ideas, and both of them in consequence
advanced to a deeper interpretation of social
life as they grew older. In 1846 Gladstone
ranked as a Conservative, but he parted from
his old traditions under the leadership of
Peel on the question of Free Trade, and for
many years to come the most notable of his
public services lay in the completion of the
Cobdenite policy of financial emancipation.
In the pursuit of this policy he was brought
into collision with the House of Lords, and
it was his active intervention in 1859-60

102

GLADSTONE AND MILL 103

which saved the Commons from a humiliating
surrender, and secured its financial suprem-
acy unimpaired until 1909. In the follow-
ing decade he stood for the extension of the
suffrage, and it was his Government which, in
1884, carried the extension of the representa-
tive principle to the point at which it rested
twenty-seven years later. In economics Glad-
stone kept upon the whole to the Cobdenite
principles which he acquired in middle life.
He was not sympathetically disposed to the
" New Unionism " and the semi-socialistic
ideas that came at the end of the 'eighties,
which, in fact, constituted a powerful cross
current to the political work that he had
immediately in hand. Yet in relation to
Irish land he entered upon a new departure
which threw over freedom of contract in a
leading case where the two parties were on
glaringly unequal terms. No abstract thinker,
he had a passion for justice in the concrete
which was capable of carrying him far. He
knew tyranny when he saw it, and upon it he
waged unremitting and many-sided war.

But his most original work was done
in the sphere of imperial relations. The
maligned Majuba settlement was an act of

104 LIBERALISM

justice which came too late to effect a per-
manent undoing of mischief. All the greater
was the courage of the statesman who could
throw himself at that time upon the in-
herent force of national liberty and inter-
national fair dealing. In the case of Ireland
Gladstone again relied on the same principles,
but another force was necessary to carry the
day, a force which no man can command,
the force of time. In international dealings
generally Gladstone was a pioneer. His
principle was not precisely that of Cobden.
He was not a non-interventionist. He took
action on behalf of Greece, and would have
done so on behalf of the Armenians, to save
the national honour and prevent a monstrous
wrong. The Gladstonian principle may be
defined by antithesis to that of Machiavelli,
and to that of Bismarck, and to the practice
of every Foreign Office. As that practice
proceeds on the principle that reasons of State
justify everything, so Gladstone proceeded on
the principle that reasons of State justify
nothing that is not justified already by the
human conscience. The statesman is for him
a man charged with maintaining not only
the material interests but the honour of his

GLADSTONE AND MILL 105

country. He is a citizen of the world in that
he represents his nation, which is a member
of the community of the world. He has to
recognize rights and duties, as every represent-
ative of every other human organization has
to recognize rights and duties. There is no
line drawn beyond which human obligations
cease. There is no gulf across which the voice
of human suffering cannot be heard, beyond
which massacre and torture cease to be
execrable. Simply as a patriot, again, a man
should recognize that a nation may become
great not merely by painting the map red, or
extending her commerce beyond all precedent,
but also as the champion of justice, the suc-
courer of the oppressed, the established home
of freedom. From the denunciation of the
Opium War, from the exposure of the Neapoli-
tan prisons, to his last appearance on the
morrow of the Constantinople massacre this
was the message which Gladstone sought to
convey. He was before his time. He was
not always able to maintain his principle in
his own Cabinet, and on his retirement the
world appeared to relapse definitely into the
older ways. His own party gave itself up in
large measure to opposite views. On the

D 2

106 LIBERALISM

other hand, careful and unprejudiced criticism
will recognize that the chief opponent of his
old age, Lord Salisbury, had imbibed some-
thing of his spirit, and under its influence did
much to save the country from the excesses
of Imperialism, while his follower. Sir Henry
Campbell-Bannerman, used the brief term of
his power to reverse the policy of racial
domination in South Africa and to prove the
value of the old Gladstonian trust in the
recuperative force of political freedom. It
may be added that, if cynicism has since
appeared to hold the field in international
politics, it is the cynicism of terror rather than
the cynicism of ambition. The Scare has
superseded the Vision as the moving force in
our external relations, and there are now signs
that the Scare in turn has spent its force and
is making room at last for Sense.

In other respects, Gladstone was a moral
rather than an intellectual force. He raised
the whole level of public life. By habitually
calling upon what was best in men, he deep-
ened the sense of public responsibility and
paved the way, half unconsciously, for the
fuller exercise of the social conscience. Mill
was also a moral force, and the most persist-

GLADSTONE AND MILL 107

ent influence of his books is more an effect
of character than of intellect. But, in place
of Gladstone's driving power and practical
capacity, Mill had the qualities of a life-
long learner, and in his single person he
spans the interval between the old and the
new Liberalism. Brought up on the pure
milk of the Benthamite word, he never
definitely abandoned the first principles of
his father. But he was perpetually bring-
ing them into contact with fresh experience
and new trains of thought, considering how
they worked, and how they ought to be modi-
fied in order to maintain what was really
sound and valuable in their content. Hence,
Mill is the easiest person in the world to
convict of inconsistency, incompleteness, and
lack of rounded system. Hence, also, his
work will survive the death of many con-
sistent, complete, and perfectly rounded
systems.

As a utilitarian. Mill cannot appeal to any
rights of the individual that can be set in
opposition to the public welfare. His method
is to show that the permanent welfare of the
public is bound up with the rights of the
individual. Of course, there are occasions

108 LIBERALISM

on which the immediate expediency of the
pubhc would be met by ignoring personal
rights. But if the rule of expediency were
followed there would be neither right nor
law at all. There would be no fixed rules
in social life, and nothing to which men
could trust in guiding their conduct. For
the utilitarian, then, the question of right
resolves itself into the question: What claim
is it, in general and as a matter of principle,
advisable for society to recognize ? What in
any given relation are the permanent conditions
of social health ? In regard to liberty Mill's
reply turns on the moral or spiritual forces
which determine the life of society. First,
particularly as regards freedom of thought and
discussion, society needs light. Truth has
a social value, and we are never to suppose
that we are in the possession of complete and
final truth. But truth is only to be sought
by experience in the world of thought, and
of action as well. In the process of experi-
mentation there are endless opportunities of
error, and the free search for truth therefore
involves friction and waste. The promulga-
tion of error will do harm, a harm that might
be averted if error were suppressed. But

GLADSTONE AND MILL 109

suppression by any other mearjis than those
of rational suasion is one of those remedies
which cure the disease by killing the patient.
It paralyzes the free search for truth. Not
only so, but there is an element of positive
value in honest error which places it above
mechanically accepted truth. So far as it
is honest it springs from the spontaneous
operation of the mind on the basis of some
partial and incomplete experience. It is, so
far as it goes, an interpretation of experience,
though a faulty one, whereas the belief im-
posed by authority is no interpretation of
experience at all. It involves no personal
effort. Its blind acceptance seals the resigna-
tion of the will and the intellect to effacement
and stultification.

The argument on this side does not rest
on human fallibihty. It appeals in its full
strength to those who are most confident
that they possess truth final and complete.
They are asked to recognize that the way
in which this truth must be communicated
to others is not by material but by spiritual
means, and that if they hold out physical
threats as a deterrent, or worldly advan-
tage as a means of persuasion, they are

110 LIBERALISM

destroying not merely the fruits but the very
root of truth as it grows within the human
mind. Yet the argument receives additional
force when we consider the actual history of
human belief. The candid man who knows
anything of the movements of thought will
recognize that even the faith which is most
vital to him is something that has grown
through the generations, and he may infer,
if he is reasonable, that as it has grown in the
past so, if it has the vital seed within it, it will
grow in the future. It may be permanent
in outline, but in content it will change.
But, if truth itself is an expanding circle of
ideas that grows through criticism and by
modification, we need say no more as to the
rough and imperfect apprehension of truth
which constitutes the dominant opinion of
society at any given moment. It needs little
effort of detachment to appreciate the danger
of any limitation of inquiry by the collective
will whether its organ be law or the repressive
force of public opinion.

The foundation of liberty on this side, then,
is the conception of thought as a growth de-
pendent on spiritual laws, flourishing in the
movement of ideas as guided by experience.

GLADSTONE AND MILL 111

reflection and feeling, corrupted by the intru-
sion of material considerations, slain by the
guillotine of finality. The same conception
is broadened out to cover the whole idea of
personality. Social well-being cannot be in-
compatible with individual well-being. But
individual well-being has as its foundation
the responsible life of the rational creature.
Manhood, and Mill would emphatically add
womanhood too, rests on the spontaneous
development of faculty. To find vent for the
capacities of feeling, of emotion, of thought,
of action, is to find oneself. The result is no
anarchy. The self so found has as the pivot
of its life the power of control. To introduce
some unity into life, some harmony into
thought, action and feeling, is its central
achievement, and to realize its relation to
others and guide its own life thereby, its
noblest rule. But the essential of control is
that it should be self-control. Compulsion
may be necessary for the purposes of external
order, but it adds nothing to the inward life
that is the true being of man. It even
threatens it with loss of authority and in-
fringes the sphere of its responsibility. It is a
means and not an end, and a means that

112 LIBERALISM

readily becomes a danger to ends that are very
vital. Under self -guidance individuals will
diverge widely, and some of their eccentricities
will be futile, others wasteful, others even
painful and abhorrent to witness. But, upon
the whole, it is good that they should differ.
Individuality is an element of well-being, and
that not only because it is the necessary
consequence of self-government, but because,
after all allowances for waste, the common life
is fuller and richer for the multiplicity of types
that it includes, and that go to enlarge the area
of collective experience. The larger wrong
done by the repression of women is not the
loss to women themselves who constitute one
half of the community, but the impoverish-
ment of the community as a whole, the loss of
all the elements in the common stock which
the free play of the woman's mind would
contribute.

Similar principles underlie Mill's treatment
of representative government. If the adult
citizen, male or female, has a right to vote, it
is not so much as a means to the enforcement
of his claims upon society, but rather as a
means of enforcing his personal responsibility
for the actions of the community. The problem

GLADSTONE AND MILL 118

of character is the determining issue in the
question of government. If men could be
spoon-fed with happiness, a benevolent despot-
ism would be the ideal system. If they are to
take a part in working out their own salvation,
they must be summoned to their share in the
task of directing the common life. Carrying
this principle further. Mill turned the edge of
the common objection to the extension of the
suffrage based on the ignorance and the irre-
sponsibility of the voters. To learn anything
men must practise. They must be trusted with
more responsibility if they are to acquire the
sense of responsibility. There were dangers
in the process, but there were greater dangers
and there were fewer elements of hope as long
as the mass of the population was left outside
the circle of civic rights and duties. The
greatest danger that Mill saw in democracy
was that of the tyranny of the majority. He
emphasized, perhaps more than any Liberal
teacher before him, the difference between the
desire of the majority and the good of the
community. He recognized that the different
rights for which the Liberal was wont to plead
might turn out in practice hard to reconcile
with one another, that if personal liberty were

114 LIBERALISM

fundamental it might only be imperilled by a
so-called political liberty which would give to
the majority unlimited powers of coercion.
He was, therefore, for many years anxiously
concerned with the means of securing a fair
hearing and fair representation to minorities,
and as a pioneer of the movement for Pro-
portional Representation he sought to make
Parliament the reflection not of a portion of
the people, however preponderant numerically,
but of the whole.

On the economic side of social life Mill
recognized in principle the necessity of con-
trolling contract where the parties were not
on equal terms, but his insistence on personal
responsibility made him chary in extending
the principle to grown-up persons, and his
especial attachment to the cause of feminine
emancipation led him to resist the tide of
feeling which was, in fact, securing the first
elements of emancipation for the woman
worker. He trusted at the outset of his
career to the elevation of the standard of
comfort as the best means of improving the
position of the wage-earner, and in this ele-
vation he regarded the limitation of the family
as an essential condition. As he advanced in

GLADSTONE AND MILL 115

life, however, he became more and more dis-
satisfied with the whole structure of a system
which left the mass of the population in the
position of wage-earners, while the minority
lived on rents, profits, and the interest on in-
vested capital. He came to look forward to a
co-operative organization of society in which
a man would learn to " dig and weave for his
country," as he now is prepared to fight for
it, and in which the surplus products of
industry would be distributed among the pro-
ducers. Li middle life voluntary co-operation
appeared to him the best means to this end,
but towards the close he recognized that his
change of views was such as, on the whole, to
rank him with the Socialists, and the brief
exposition of the Socialist ideal given in his
Autobiography remains perhaps the best
summary statement of Liberal Sociahsm that
we possess.

CHAPTER VI

THE HEART OF LIBERALISM

The teaching of Mill brings us close to the
heart of Liberalism. We learn from him,
in the first place, that liberty is no mere
formula of law, or of the restriction of law.
There may be a tyranny of custom, a tyranny
of opinion, even a tyranny of circumstance,
as real as any tyranny of government and more
pervasive. Nor does liberty rest on the self-
assertion of the individual. There is scope
abundant for Liberalism and illiberalism in
personal conduct. Nor is liberty opposed to
discipline, to organization, to strenuous
conviction as to what is true and just. Nor
is it to be identified with tolerance of opposed
opinions. The Liberal does not meet opinions
which he conceives to be false with toleration,
as though they did not matter. He meets
them with justice, and exacts for them a fair
hearing as though they mattered just as much
as his own. He is always ready to put his

116

THE HEART OF LIBERALISM 117

own convictions to the proof, not because he
doubts them, but because he beheves in them.
For, both as to that which he holds for true
and as to that which he holds for false, he
beheves that one final test applies. Let error
have free play, and one of two things will
happen. Either as it develops, as its implica-
tions and consequences become clear, some
elements of truth will appear within it.
They will separate themselves out; they will
go to enrich the stock of human ideas; they
will add something to the truth which he him-
self mistakenly took as final; they will serve
to explain the root of the error ; for error itself
is generally a truth misconceived, and it is
only when it is explained that it is finally and
satisfactorily confuted. Or, in the alternative,
no element of truth will appear. In that case
the more fully the error is understood, the more
patiently it is followed up in all the windings
of its implications and consequences, the more
thoroughly will it refute itself. The cancerous
growth cannot be extirpated by the knife.
The root is always left, and it is only the evo-
lution of the self-protecting anti-toxin that
works the final cure. Exactly parallel is the
logic of truth. The more the truth is de-

118 LIBERALISM

veloped in all its implications, the greater is the
opportunity of detecting any element of error
that it may contain ; and, conversely, if no
error appears, the more completely does it
establish itself as the whole truth and no-
thing but the truth. Liberalism applies the
wisdom of Gamaliel in no spirit of indifference,
but in the full conviction of the potency of
truth. If this thing be of man, i. e. if it is not
rooted in actual verity, it will come to nought.
If it be of God, let us take care that we be not
found fighting against God.

Divergences of opinion, of character, of con-
duct are not unimportant matters. They may
be most serious matters, and no one is called
on in the name of Liberalism to overlook their
seriousness. There are, for example, certain
disqualifications inherent in the profession of
certain opinions. It is not illiberal to recog-
nize such disqualifications. It is not illiberal
for a Protestant in choosing a tutor for his son
to reject a conscientious Roman Catholic who
avows that all his teaching is centred on the
doctrine of his Church. It would be illiberal
to reject the same man for the specific purpose
of teaching arithmetic, if he avowed that he
had no intention of using his position for the

THE HEART OF LIBERALISM 119

purpose of religious propagandism. For the
former purpose the divergence of religious
opinion is an inherent disqualification. It
negates the object propounded, which is the
general education of the boy on lines in
which the father believes. For the latter
purpose the opinion is no disqualification.
The devout Catholic accepts the multiplica-
tion table, and can impart his knowledge
without reference to the infallibility of the
Pope. To refuse to employ him is to impose
an extraneous penalty on his convictions.
It is not illiberal for an editor to decline the
services of a member of the opposite party as
a leader writer, or even as a political reviewer
or in any capacity in which his opinions
would affect his work. It is illiberal to reject
him as a compositor or as a clerk, or in any
capacity in which his opinions would not
affect his work for the paper. It is not
illiberal to refuse a position of trust to the
man whose record shows that he is likely
to abuse such a trust. It is illiberal — and this
the " moralist " has yet to learn — to punish
a man who has done a wrong in one relation
by excluding him from the performance of
useful social functions for which he is perfectly

120 LIBERALISM

fitted, by which he could at once serve society
and re-establish his own self-respect. There
may, however, yet come a time when Liberal-
ism, already recognized as a duty in religion
and in politics, will take its true place at the
centre of our ethical conceptions, and will
be seen to have its application not only to
him whom we conceive to be the teacher of
false opinions, but to the man whom we hold
a sinner.

The ground of Liberalism so understood is
certainly not the view that a man's personal
opinions are socially indifferent, nor that his
personal morality matters nothing to others.
So far as Mill rested his case on the distinction
between self-regarding actions and actions
that affect others, he was still dominated by
the older individualism. We should frankly
recognize that there is no side of a man's life
which is unimportant to society, for whatever
he is, does, or thinks may affect his own well-
being, which is and ought to be matter of
common concern, and may also directly or
indirectly affect the thought, action, and
character of those with whom he comes in
contact. The underlying principle may be
put in two ways. In the first place, the man

THE HEART OF LIBERALISM 121

is much more than his opinions and his actions.
Carlyle and Sterling did not differ " except
in opinion." To most of us that is just what
difference means. Carlyle was aware that
there was something much deeper, some-
thing that opinion just crassly formulates,
and for the most part formulates inadequately,
that is the real man. The real man is some-
thing more than is ever adequately expressed
in terms which his fellows can understand;
and just as his essential humanity lies deeper
than all distinctions of rank, and class, and
colour, and even, though in a different sense,
of sex, so also it goes far below those com-
paratively external events which make one
man figure as a saint and another as a
criminal. This sense of ultimate oneness is
the real meaning of equality, as it is the
foundation of social solidarity and the bond
which, if genuinely experienced, resists the
disruptive force of all conflict, intellectual,
religious, and ethical.

But, further, while personal opinions and
social institutions are like crystallized results,
achievements that have been won by certain
definite processes of individual or collective
effort, human personality is that within which

122 LIBERALISM

lives and grows, which can be destroyed but
cannot be made, which cannot be taken to
pieces and repaired, but can be placed under
conditions in which it will flourish and expand,
or, if it is diseased, under conditions in which
it will heal itself by its own recuperative
powers. The foundation of liberty is the
idea of growth. Life is learning, but whether
in theory or practice what a man genuinely
learns is what he absorbs, and what he absorbs
depends on the energy which he himself puts
forth in response to his surroundings. Thus, to
come at once to the real crux, the question of
moral discipline, it is of course possible to reduce
a man to order and prevent him from being
a nuisance to his neighbours by arbitrary con-
trol and harsh punishment. This may be to
the comfort of the neighbours, as is admitted,
but regarded as a moral discipline it is a con-
tradiction in terms. It is doing less than
nothing for the character of the man himself.
It is merely crushing him, and unless his will
is killed the effect will be seen if ever the
superincumbent pressure is by chance removed.
It is also possible, though it takes a much
higher skill, to teach the same man to disci-
pline himself, and this is to foster the develop-

THE HEART OF LIBERALISM 123

ment of will, of personality, of self control,
or whatever we please to call that central
harmonizing power which makes us capable
of directing om* own lives. Liberalism is the
belief that society can safely be founded on this
self-directing power of personality, that it is
only on this foundation that a true community
can be built, and that so established its founda-
tions are so deep and so wide that there is
no limit that we can place to the extent of
the building. Liberty then becomes not so
much a right of the individual as a necessity
of society. It rests not on the claim of A to
be let alone by B, but on the duty of B to
treat A as a rational being. It is not right
to let crime alone or to let error alone, but it
is imperative to treat the criminal or the
mistaken or the ignorant as beings capable of
right and truth, and to lead them on instead
of merely beating them down. The rule of
liberty is just the application of rational
method. It is the opening of the door to
the appeal of reason, of imagination, of social
feeling; and except through the response to
this appeal there is no assured progress of
society.

Now, I am not contending that these

124 LIBERALISM

principles are free from difficulty in application.
At many points they suggest difficulties both
in theory and in practice, with some of which
I shall try to deal later on. Nor, again, am
I contending that freedom is the universal
solvent, or the idea of liberty the sole founda-
tion on which a true social philosophy can be
based. On the contrary, freedom is only one
side of social life. Mutual aid is not less im-
portant than mutual forbearance, the theory
of collective action no less fundamental than
the theory of personal freedom. But, in an
inquiry where all the elements are so closely
interwoven as they are in the field of social
life, the point of departure becomes almost
indifferent. Wherever we start we shall, if we
are quite frank and consistent, be led on to
look at the whole from some central point, and
this, I think, has happened to us in working with
the conception of ' liberty.' For, beginning with
the right of the individual, and the antithesis
between personal freedom and social control,
we have been led on to a point at which we
regard liberty as primarily a matter of social
interest, as something flowing from the neces-
sities of continuous advance in those regions
of truth and of ethics which constitute the

THE HEART OF LIBERALISM 125

matters of highest social concern. At the
same time, we have come to look for the effect
of liberty in the firmer establishment of social
solidarity, as the only foundation on which
such solidarity can securely rest. We have,
in fact, arrived by a path of our own at
that which is ordinarily described as the
organic conception of the relation between
the individual and society — a conception
towards which Mill worked through his
career, and which forms the starting-point
of T. H. Green's philosophy alike in ethics
and in politics.

The term organic is so much used and
abused that it is best to state simply what
it means. A thing is called organic when
it is made up of parts which are quite
distinct from one another, but which are
destroyed or vitally altered when they are
removed from the whole. Thus, the human
body is organic because its life depends on the
functions performed by many organs, while
each of these organs depends in turn on the
life of the body, perishing and decomposing if
removed therefrom. Now, the organic view
of society is equally simple. It means that,
while the life of society is nothing but the life

126 LIBERALISM

of individuals as they act one upon another,
the life of the individual in turn would be
something utterly different if he could be
separated from society. A great deal of him
would not exist at all. Even if he himself
could maintain physical existence by the luck
and skill of a Robinson Crusoe, his mental and
moral being would, if it existed at all, be some-
thing quite different from anything that we
know. By language, by training, by simply
living with others, each of us absorbs into his
system the social atmosphere that surrounds
us. In particular, in the matter of rights and
duties which is cardinal for Liberal theory,
the relation of the individual to the com-
munity is everything. His rights and his
duties are alike defined by the common good.
What, for example, is my right ? On the face
of it, it is something that I claim. But a
mere claim is nothing. I might claim any-
thing and everything. If my claim is of right
it is because it is sound, well grounded, in the
judgment of an impartial observer. But an
impartial observer will not consider me alone.
He will equally weigh the opposed claims of
others. He will take us in relation to one
another, that is to say, as individuals involved

THE HEART OF LIBERALISM 127

in a social relationship. Further, if his de-
cision is in any sense a rational one, it must
rest on a principle of some kind; and again, as
a rational man, any principle which he asserts
he must found on some good result which it
serves or embodies, and as an impartial man
he must take the good of every one affected
into account. That is to say, he must found
his judgment on the common good. An indi-
vidual right, then, cannot conflict with the
common good, nor could any right exist apart
from the common good.

The argument might seem to make the
individual too subservient to society. But
this is to forget the other side of the original
supposition. Society consists whoily of per-
sons. It has no distinct personality separate
from and superior to those of its members.
It has, indeed, a certain collective life and
character. The British nation is a unity with
a life of its own. But the unity is constituted
by certain ties that bind together all British
subjects, which ties are in the last resort
feelings and ideas, sentiments of patriotism,
of kinship, a common pride, and a thousand
more subtle sentiments that bind together
men who speak a common language, have

128 LIBERALISM

behind them a common history, and under-
stand one another as they can understand no
one else. The British nation is not a mys-
terious entity over and above the forty odd
milHons of living souls who dwell together
under a common law. Its life is their life,
its well-being or ill-fortune their well-being or
ill-fortune. Thus, the common good to which
each man's rights are subordinate is a good
in which each man has a share. This share
consists in realizing his capacities of feeling,
of loving, of mental and physical energy, and
in realizing these he plays his part in the social
life, or, in Green's phrase, he finds his own
good in the common good.

Now, this phrase, it must be admitted,
involves a certain assumption, which may be
regarded as the fundamental postulate of
the organic view of society. It implies that
such a fulfilment or full development of
personality is practically possible not for one
man only but for all members of a community.
There must be a line of development open
along which each can move in harmony with
others. Harmony in the full sense would
involve not merely absence of conflict but
actual support. There must be for each, then.

THE HEART OF LIBERALISM 129

possibilities of development such as not merely
to permit but actively to further the develop-
ment of others. Now, the older economists
conceived a natural harmony, such that the
interests of each would, if properly under-
stood and unchecked by outside interference,
inevitably lead him in courses profitable to
others and to society at large. We saw that
this assumption was too optimistic. The
conception which we have now reached does
not assume so much. It postulates, not that
there is an actually existing harmony requir-
ing nothing but prudence and coolness of judg-
ment for its effective operation, but only that
there is a possible ethical harmony, to which,
partly by discipline, partly by the improve-
ment of the conditions of life, men might
attain, and that in such attainment lies the
social ideal. To attempt the systematic proof
of this postulate would take us into the field
of philosophical first principles. It is the
point at which the philosophy of politics
comes into contact with that of ethics. It
must suffice to say here that, just as the
endeavour to establish coherent system in the
world of thought is the characteristic of the
rational impulse which lies at the root of

E /

130 LIBERALISM

science and philosophy, so the impulse to
establish harmony in the world of feeling and
action — a harmony which must include all
those who think and feel — is of the essence of
the rational impulse in the world of practice.
To move towards harmony is the persistent
impulse of the rational being, even if the goal
lies always beyond the reach of accomplished
effort.

These principles may appear very abstract,
remote from practical life, and valueless for
concrete teaching. But this remoteness is of
the nature of first principles when taken
without the connecting links that bind them
to the details of experience. To find some of
these links let us take up again our old Liberal
principles, and see how they look in the light
of the organic, or, as we may now call it, the
harmonic conception. We shall readily see,
to begin with, that the old idea of equality
has its place. For the common good includes
every individual. It is founded on personality,
and postulates free scope for the development
of personality in each member of the com-
munity. This is the foundation not only of
equal rights before the law, but also of what
is called equality of opportunity. It does not

THE HEART OF LIBERALISM 131

necessarily imply actual equality of treatment
for all persons any more than it implies original
equality of powers.^ It does, I think, imply
that whatever inequality of actual treatment,
of income, rank, office, consideration, there be
in a good social system, it would rest, not on
the interest of the favoured individual as
such, but on the common good. If the exist-
ence of millionaires on the one hand and of
paupers on the other is just, it must be because
such contrasts are the result of an economic
system which upon the whole works out for
the common good, the good of the pauper
being included therein as well as the good of
the millionaire; that is to say, that when we
have well weighed the good and the evil of all
parties concerned we can find no alternative
open to us which could do better for the good
of all. I am not for the moment either
attacking or defending any economic system.
I point out only that this is the position which
according to the organic or harmonic view of
society must be made good by any rational
defence of grave inequality in the distribution
of wealth. In relation to equality, indeed, it

* An absurd misconception fostered principally by
opponents of equality for controversial purposes.

132 LIBERALISM

appears, oddly enough, that the harmonic prin-
ciple can adopt wholesale, and even expand,
one of the " Rights of Man " as formulated
in 1789 — " Social distinctions can only be
founded upon common utility." If it is
really just that A should be superior to B in
wealth or power or position, it is only because
when the good of all concerned is considered,
among whom B is one, it turns out that
there is a net gain in the arrangement as
compared with any alternative that we can
devise.

If we turn from equality to liberty, the general
lines of argument have already been indicated,
and the discussion of difficulties in detail must
be left for the next chapter. It need only be
repeated here that on the harmonic principle
the fundamental importance of liberty rests
on the nature of the " good" itself, and that
whether we are thinking of the good of society
or the good of the individual. The good is
something attained by the development of the
basal factors of personality, a development
proceeding by the widening of ideas, the
awakening of the imagination, the play of
affection and passion, the strengthening and
extension of rational control. As it is the

THE HEART OF LIBERALISM 133

development of these factors in each human
being that makes his life worth having, so it
is their harmonious interaction, the response
of each to each, that makes of society a living
whole. Liberty so interpreted cannot, as we
have seen, dispense with restraint; restraint,
however, is not an end but a means to an end,
and one of the principal elements in that end
is the enlargement of liberty.

But the collective activity of the community
does not necessarily proceed by coercion or
restraint. The more securely it is founded
on freedom and general willing assent, the more
it is free to work out all the achievements
in which the individual is feeble or powerless
while combined action is strong. Human
progress, on whatever side we consider it,
is found to be in the main social progress, the
work of conscious or unconscious co-operation.
In this work voluntary association plays a
large and increasing part. But the State is
one form of association among others, dis-
tinguished by its use of coercive power, by
its supremacy, and by its claim to control all
who dwell within its geographical limits.
What the functions of such a form of associa-
tion are to be we shall have to consider a

134 LIBERALISM

little further in connection with the other
questions which we have already raised. But
that, in general, we are justified in regarding the
State as one among many forms of human
association for the maintenance and improve-
ment of life is the general principle that we
have to point out here, and this is the point
at which we stand furthest from the older
Liberalism. We have, however, aheady seen
some reason for thinking that the older
doctrines led, when carefully examined, to a
more enlarged conception of State action than
appeared on the surface; and we shall see more
fully before we have done that the " positive "
conception of the State which we have now
reached not only involves no conflict with
the true principle of personal liberty, but is
necessary to its effective realization.

There is, in addition, one principle of
historic Liberalism with which our present
conception of the State is in full sympathy.
The conception of the common good as
it has been explained can be realized in
its fullness only through the common will.
There are, of course, elements of value in
the good government of a benevolent despot
or of a fatherly aristocracy. Within any

THE HEART OF LIBERALISM 135

peaceful order there is room for many good
things to flourish. But the full fruit of social
progress is only to be reaped by a society in
which the generality of men and women are
not only passive recipients but practical con-
tributors. To make the rights and responsibili-
ties of citizens real and living, and to extend
them as widely as the conditions of society
allow, is thus an integral part of the organic
conception of society, and the justification
of the democratic principle. It is, at the same
time, the justification of nationalism so far as
nationalism is founded on a true interpretation
of history. For, inasmuch as the true social
harmony rests on feeling and makes use of
all the natural ties of kinship, of neighbourli-
ness, of congruity of character and belief, and
of language and mode of life, the best, healthi-
est, and most vigorous political unit is that to
which men are by their own feelings strongly
drawn. Any breach of such unity, whether
by forcible disruption or by compulsory in-
clusion in a larger society of alien sentiments
and laws, tends to mutilate — or, at lowest,
to cramp — the spontaneous development of
social life. National and personal freedom
are growths of the same root, and their

136 LIBERALISM

historic connection rests on no accident, but
on ultimate identity of idea.

Thus in the organic conception of society
each of the leading ideas of historic Liberalism
has its part to play. The ideal society is
conceived as a whole which lives and flourishes
by the harmonious growth of its parts, each
of which in developing on its own lines and
in accordance with its own nature tends on
the whole to further the development of
others. There is some elementary trace of
such harmony in every form of social life that
can maintain itself, for if the conflicting
impulses predominated society would break
up, and when they do predominate society
does break up. At the other extreme, true
harmony is an ideal which it is perhaps beyond
the power of man to realize, but which serves to
indicate the line of advance. But to admit this
is to admit that the lines of possible develop-
ment for each individual or, to use a more
general phrase, for each constituent of the
social order are not limited and fixed. There
are many possibilities, and the course that will
in the end make for social harmony is only
one among them, while the possibilities of
disharmony and conflict are many. The

THE HEART OF LIBERALISM 137

progress of society like that of the individual
depends, then, ultimately on choice. It is not
" natural," in the sense in which a physical
law is natural, that is, in the sense of going
forward automatically from stage to stage
without backward turnings, deflections to the
left, or fallings away on the right. It is natural
only in this sense, that it is the expression
of deep-seated forces of human nature which
come to their own only by an infinitely slow
and cumbersome process of mutual adjust-
ment. Every constructive social doctrine
rests on the conception of human progress.
The heart of Liberalism is the understanding
that progress is not a matter of mechanical
contrivance, but of the liberation of Hving
spiritual energy. Good mechanism is that
which provides the channels wherein such
energy can flow unimpeded, unobstructed by
its own exuberance of output, vivifying the
social structure, expanding and ennobling the
life of mind.

E 2

CHAPTER VII

THE STATE AND THE INDIVIDUAL

We have seen something of the principle
underlying the Liberal idea and of its various
applications. We have now to put the test
question. Are these different applications
compatible ? Will they work together to make
that harmonious whole of which it is easy
enough to talk in abstract terms ? Are
they themselves really harmonious in theory
and in practice ? Does scope for individual
development, for example, consort with the
idea of equality ? Is popular sovereignty a
practicable basis of personal freedom, or does
it open an avenue to the tyranny of the mob ?
Will the sentiment of nationality dwell in
unison with the ideal of peace ? Is the love
of liberty compatible with the full realization
of the common will ? If reconcilable in theory,
may not these ideals collide in practice ? Are
there not clearly occasions demonstrable in

138

STATE AND INDIVIDUAL 139

history when development in one direction in-
volves retrogression in another ? If so, how
are we to strike the balance of gain and loss ?
Does political progress offer us nothing but
a choice of evils, or may we have some confi-
dence that, in solving the most pressing pro-
blem of the moment, we shall in the end be
in a better position for grappling with the
obstacles that come next in turn ?

I shall deal with these questions as far as
limits of space allow, and I will take first the
question of liberty and the common will upon
which everything turns. Enough has already
been said on this topic to enable us to shorten
the discussion. We have seen that social
liberty rests on restraint. A man can be free
to direct his own life only in so far as others are
prevented from molesting and interfering with
him. So far there is no real departure from
the strictest tenets of individualism. We have,
indeed, had occasion to examine the applica-
tion of the doctrine to freedom of contract on
the one hand, and to the action of combina-
tions on the other, and have seen reason to
think that in either case nominal freedom, that
is to say, the absence of legal restraint, might
have the effect of impairing real freedom, that

140 LIBERALISM

is to say, would allow the stronger party to
coerce the weaker. We have also seen that
the effect of combination may be double edged,
that it niay restrict freedom on one side and
enlarge it on the other. In all these cases our
contention has been simply that we should be
guided by real and not by verbal considerations,
— that we should ask in every case what
policy will yield effective freedom — and we
have found a close connection in each instance
between freedom and equality. In these cases,
however, we were dealing with the relations
of one man with another, or of one body of
men with another, and we could regard the
community as an arbiter between them whose
business it was to see justice done and prevent
the abuse of coercive power. Hence we could
treat a very large part of the modern develop-
ment of social control as motived by the desire
for a more effective liberty. The case is not
so clear when we find the will of the individual
in conflict with the will of the community as a
whole. When such conflict occurs, it would
seem that we must be prepared for one of two
things. Either we must admit the legitimacy
of coercion, avowedly not in the interests of
freedom but in furtherance, without regard to

STATE AND INDIVIDUAL 141

freedom, of other ends which the community
deems good. Or we must admit Hmitations
which may cramp the development of the
general will, and perchance prove a serious
obstacle to collective progress. Is there any
means of avoiding this conflict ? Must we
leave the question to be fought out in each
case by a balance of advantages and disadvan-
tages, or are there any general considerations
which help us to determine the true sphere of
collective and of private action ?

Let us first observe that, as Mill pointed
out long ago, there are many forms of collective
action which do not involve coercion. The
State may provide for certain objects which
it deems good without compelling any one to
make use of them. Thus it may maintain
hospitals, though any one who can pay for
them remains free to employ his own doctors
and nurses. It may and does maintain a
great educational system, while leaving every
one free to maintain or to attend a private
school. It maintains parks and picture
galleries without driving any one into them.
There is a municipal tramway service, which
does not prevent private people from running
motor 'buses along the same streets, and so

142 LIBERALISM

on. It is true that for the support of these
objects rates and taxes are compulsorily
levied, but this form of compulsion raises a
set of questions of which we shall have to
speak in another connection, and does not
concern us here. For the moment we have
to deal only with those actions of State which
compel all citizens, or all whom they concern,
to fall in with them and allow of no divergence.
This kind of coercion tends to increase. Is
its extension necessarily an encroachment
upon liberty, or are the elements of value
secured by collective control distinct from the
elements of value secured by individual
choice, so that within due limits each may
develop side by side ?

We have already declined to solve the prob-
lem by applying Mill's distinction between
self-regarding and other-regarding actions,
fu-st because there are no actions which may
not directly or indirectly affect others, secondly
because even if there were they would not
cease to be matter of concern to others.
The common good includes the good of every
member of the community, and the injury
which a man inflicts upon himself is matter
of common concern, even apart from any

STATE AND INDIVIDUAL 143

ulterior effect upon others. If we refrain
from coercing a man for his own good, it is
not because his good is indifferent to us, but
because it cannot be furthered by coercion.
The difficulty is founded on the nature of the
good itself, which on its personal side depends
on the spontaneous flow of feeling checked
and guided not by external restraint but by
rational self-control. To try to form char-
acter by coercion is to destroy it in the making.
Personality is not built up from without but
grows from within, and the function of the
outer order is not to create it, but to provide
for it the most suitable conditions of growth.
Thus, to the common question whether it is
possible to make men good by Act of Parlia-
ment, the reply is that it is not possible to
compel morality because morality is the act
or character of a free agent, but that it is
possible to create the conditions under which
morality can develop, and among these not
the least important is freedom from compulsion
by others.

The argument suggests that compulsion is
limited not by indifference — how could the
character of its members be matter of
indifference to the community ? — but by its

144 LIBERALISM

own incapacity to achieve its ends. The spirit
cannot be forced. Nor, conversely, can it
prevail by force. It may require social
expression. It may build up an association,
a church for example, to carry out the common
objects and maintain the common life of aU
who are like-minded. But the association
must be free, because spiritually everything
depends not on what is done but on the will
with which it is done. The limit to the value
of coercion thus lies not in the restriction of
social purpose, but in the conditions of personal
life. No force can compel growth. Whatever
elements of social value depend on the accord
of feeling, on comprehension of meaning, on
the assent of will, must come through liberty.
Here is the sphere and function of liberty in
the social harmony.

Where, then, is the sphere of compulsion,
and what is its value ? The reply is that
compulsion is of value where outward con-
formity is of value, and this may be in any
case where the non-conformity of one wrecks
the purpose of others. We have already
remarked that liberty itself only rests upon
restraint. Thus a religious body is not,
properly speaking, free to march in procession

STATE AND INDIVIDUAL 145

through the streets unless people of a different
religion are. restrained from pelting the proces-
sion with stones and pursuing it with insolence.
We restrain them from disorder not to teach
them the genuine spirit of religion, which
they will not learn in the pohce court, but to
secure to the other party the right of worship
unmolested. The enforced restraint has its
value in the action that it sets free. But we
may not only restrain one man from obstruct-
ing another — and the extent to which we do
this is the measure of the freedom that we
maintain — but we may also restrain him
from obstructing the general will; and this
we have to do whenever uniformity is neces-
sary to the end which the general will has
in view. The majority of employers in a
trade we may suppose would be willing to
adopt certain precautions for the health or
safety of their workers, to lower hours or to
raise the rate of wages. They are unable to
do so, however, as long as a minority, perhaps
as long as a single employer, stands out. He
would beat them in competition if they were
voluntarily to undertake expenses from which
he is free. In this case, the will of a minority,
possibly the will of one man, thwarts that of

146 LIBERALISM

the remainder. It coerces them, indirectly, but
quite as effectively as if he were their master.
If they, by combination, can coerce him no
principle of liberty is violated. It is coercion
against coercion, differing possibly in form and
method, but not in principle or in spirit. Fur-
ther, if the community as a whole sympathizes
with the one side rather than the other, it can
reasonably bring the law into play. Its
object is not the moral education of the
recusant individuals. Its object is to secure
certain conditions which it believes necessary
for the welfare of its members, and which
can only be secured by an enforced uni-
formity.

It appears, then, that the true distinction
is not between self-regarding and other-
regarding actions, but between coercive and
non-coercive actions. The function of State
coercion is to override individual coercion,
and, of course, coercion exercised by any
association of individuals within the State.
It is by this means that it maintains liberty
of expression, security of person and property,
genuine freedom of contract, the rights of
public meeting and association, and finally
its own power to carry out common objects

STATE AND INDIVIDUAL 147

undefeated by the recalcitrance of individual
members. Undoubtedly it endows both indi-
viduals and associations with powers as well
as with rights. But over these powers it
must exercise supervision in the interests of
equal justice. Just as compulsion failed in
the sphere of liberty, the sphere of spiritual
growth, so liberty fails in the external order
wherever, by the mere absence of supervisory
restriction, men are able directly or indi-
rectly to put constraint on one another. This
is why there is no intrinsic and inevitable
conflict between liberty and compulsion, but
at bottom a mutual need. The object of
compulsion is to secure the most favourable
external conditions of inward growth and
happiness so far as these conditions depend
on combined action and uniform observance.
The sphere of liberty is the sphere of growth
itself. There is no true opposition between
liberty as such and control as such, for every
liberty rests on a corresponding act of control.
The true opposition is between the control
that cramps the personal life and the spiritual
order, and the control that is aimed at se-
curing the external and material conditions
of their free and unimpeded development.

148 LIBERALISM

I do not pretend that this delimitation solves
all problems. The " inward " life will seek to
express itself in outward acts. A religious
ordinance may bid the devout refuse military-
service, or withhold the payment of a tax, or
decline to submit a building to inspection.
Here are external matters where conscience
and the State come into direct conflict, and
where is the court of appeal that is to decide
between them ? In any given case the right,
as judged by the ultimate effect on human
welfare, may, of course, be on the one side, or
on the other, or between the two. But is
there anything to guide the two parties as
long as each believes itself to be in the right
and sees no ground for waiving its opinion ?
To begin with, clearly the State does well to
avoid such conflicts by substituting alterna-
tives. Other duties than that of military
service may be found for a follower of Tolstoy,
and as long as he is willing to take his full
share of burdens the difficulty is fairly met.
Again, the mere convenience of the majority
cannot be fairly weighed against the religious
convictions of the few. It might be con-
venient that certain public work should
be done on Satm'day, but mere conveni-

STATE AND INDIVIDUAL 149

ence would be an insufficient ground for com-
pelling Jews to participate in it. Religious
and ethical conviction must be weighed
against religious and ethical conviction. It
is not number that counts morally, but the
belief that is reasoned out according to the
best of one's lights as to the necessities of
the common good. But the conscience of the
community has its rights just as much as the
conscience of the individual. If we are con-
vinced that the inspection of a convent laundry
is required in the interest, not of mere official
routine, but of justice and humanity, we can
do nothing but insist upon it, and when all
has been done that can be done to save the
individual conscience the common conviction
of the common good must have its way. In
the end the external order belongs to the
community, and the right of protest to the
individual.

On the other side, the individual owes more
to the conununity than is always recognized.
Under modern conditions he is too much in-
clined to take for granted what the State does
for him and to use the personal security and
liberty of speech which it affords him as a
vantage ground from which he can in safety

150 LIBERALISM

denounce its works and repudiate its authority.
He assumes the right to be in or out of the
social system as he chooses. He relies on the
general law which protects him, and emanci-
pates himself from some particular law which he
finds oppressive to his conscience. He forgets
or does not take the trouble to reflect that, if
every one were to act as he does, the social
machine would come to a stop. He certainly
fails to make it clear how a society would
subsist in which every man should claim the
right of unrestricted disobedience to a law
which he happens to think wrong. In fact,
it is possible for an over-tender conscience to
consort with an insufficient sense of social
responsibility. The combination is unfor-
tunate ; and we may fairly say that, if the State
owes the utmost consideration to the con-
science, its owner owes a corresponding debt
to the State. With such mutual consideration,
and with the development of the civic sense,
conflicts between law and conscience are
capable of being brought within very nar-
row limits, though their complete recon-
ciliation will always remain a problem until
men are generally agreed as to the fundamental
conditions of the social harmony.

STATE AND INDIVIDUAL 151

It may be asked, on the other hand, whether
in insisting on the free development of per-
sonaHty we have not understated the duty of
society to its members. We all admit a
collective responsibility for children. Are
there not grown-up people who stand just as
much in need of care ? What of the idiot,
the imbecUe, the feeble-minded or the drunk-
ard ? What does rational self-determination
mean for these classes ? They may injure
no one but themselves except by the conta-
gion of bad example. But have we no duty
towards them, having in view their own good
alone and leaving every other consideration
aside ? Have we not the right to take the
feeble-minded under our care and to keep the
drunkard from drink, purely for their own
good and apart from every ulterior con-
sideration ? And, if so, must we not extend
the whole sphere of permissible coercion, and
admit that a man may for his own sake and
with no ulterior object, be compelled to do
what we think right and avoid what we think
wrong ?

The reply is that the argument is weak just
where it seeks to generalize. We are compelled
to put the insane under restraint for social

152 LIBERALISM

reasons apart from their own benefit. But
their own benefit would be a fully sufficient
reason if no other existed. To them, by their
misfortune, liberty, as we understand the term,
has no application, because they are incapable
of rational choice and therefore of the kind
of growth for the sake of which freedom is
valuable. The same thing is true of the feeble-
minded, and if they are not yet treated on the
same principle it is merely because the recogni-
tion of their type as a type is relatively modern.
But the same thing is also in its degree true of
the drunkard, so far as he is the victim of an
impulse which he has allowed to grow beyond
his own control; and the question whether he
should be regarded as a fit object for tutelage
or not is to be decided in each case by asking
whether such capacity of self-control as he
retains would be impaired or repaired by a
period of tutelar restraint. There is nothing
in all this to touch the essential of liberty which
is the value of the power of self-governance
where it exists. All that is proved is that where
it does not exist it is right to save men from
suffering, and if the case admits to put them
under conditions in which the normal balance
of impulse is most likely to be restored. It

STATE AND INDIVIDUAL 153

may be added that, in the case of the drunkard
— and I think the argument applies to all cases
where overwhelming impulse is apt to master
the will — it is a still more obvious and element-
ary duty to remove the sources of temptation,
and to treat as anti-social in the highest degree
every attempt to make profit out of human
weakness, misery, and wrong-doing. The case
is not unlike that of a very unequal con-
tract. The tempter is coolly seeking his
profit, and the sufferer is beset with a fiend
within. There is a form of coercion here
which the genuine spirit of liberty will not
fail to recognize as its enemy, and a form
of injury to another which is not the less
real because its weapon is an impulse which
forces that other to the consent which he
yields.

I conclude that there is nothing in the
doctrine of liberty to hinder the movement of
general will in the sphere in which it is really
efficient, and nothing in a just conception of
the objects and methods of the general will
to curtail liberty in the performance of the
functions, social and personal, in which its
value lies. Liberty and compulsion have com-
plementary functions, and the self-governing

154, LIBERALISM

State is at once the product and the condi-
tion of the self-governing individual.

Thus there is no difficulty in understanding
why the extension of State control on one side
goes along with determined resistance to
encroachments on another. It is a question
not of increasing or diminishing, but of re-
organizing, restraints. The period which has
witnessed a rapid extension of industrial
legislation has seen as determined a resistance
to anything like the establishment of doctri-
nal religious teaching by a State authority,^
and the distinction is perfectly just. At
bottom it is the same conception of liberty and
the same conception of the common will that
prompts the regulation of industry and the
severence of religious worship and doctrinal
teaching from the mechanism of State control.

So far we have been considering what the
State compels the individual to do. If we
pass to the question what the State is to do
for the individual, a different but parallel
question arises, and we have to note a corre-
sponding movement of opinion. If the State

* The objection most often taken to " undenomina-
tionalism " itself is that it is in reality a form of doctrinal
teaching seeking State endowment.

STATE AND INDIVIDUAL 155

does for the individual what he ought to do
for himself what will be the effect on character,
initiative, enterprise ? It is a question now
not of freedom, but of responsibility, and it
is one that has caused many searchings of
heart, and in respect of which opinion has
undergone a remarkable change. Thus, in
relation to poverty the older view was that the
first thing needful was self-help. It was the
business of every man to provide for himself
and his family. If, indeed, he utterly failed,
neither he nor they could be left to starve,
and there was the Poor Law machinery to
deal with his case. But the aim of every
sincere friend of the poor must be to keep
them away from the Poor Law machine.
Experience of the forty years before 1834 had
taught us what came of free resort to public
funds by way of subvention to inadequate
wages. It meant simply that the standard
of remuneration was lowered in proportion
as men could rely on public aid to make
good the deficiency, while at the same time
the incentives to independent labour were
weakened when the pauper stood on an equal
footing with the hard - working man. In
general, if the attempt was made to substitute

156 LIBERALISM

for personal effort the help of others, the
result would only sap individual initiative and
in the end bring down the rate of industrial
remuneration. It was thought, for example
— and this very point was urged against pro-
posals for Old Age Pensions — that if any of
the objects for which a man will, if possible,
provide were removed from the scope of his
own activity, he would in consequence be
content with proportionally lower wages; if
the employer was to compensate him for
accident, he would fail to make provision for
accidents on his own account; if his children
were fed by the ratepayers, he would not
earn the money wherewith to feed them.
Hence, on the one hand, it was urged that
the rate of wages would tend to adapt itself
to the necessities of the wage earner, that in
proportion as his necessities were met from
other sources his wages would fall, that ac-
cordingly the apparent relief would be in
large measure illusory, while finally, in view
of the diminished stimulus to individual
exertion, the productivity of labour would
fall off, the incentives to industry would be
diminished, and the community as a whole
would be poorer. Upon the other hand.

STATE AND INDIVIDUAL 157

it was conceived that, however deplorable
the condition of the working classes might be,
the right way of raising them was to trust to
individual enterprise and possibly, according
to some thinkers, to voluntary combination.
By these means the efficiency of labour might
be enhanced and its regular remuneration
raised. By sternly withholding all external
supports we should teach the working classes
to stand alone, and if there were pain in the
disciplinary process there was yet hope in
the future. They would come by degrees to
a position of economic independence in which
they would be able to face the risks of life,
not in reliance upon the State, but by the
force of their own brains and the strength of
their own right arms.

These views no longer command the same
measure of assent. On all sides we find the
State making active provision for the poorer
classes and not by any means for the destitute
alone. We find it educating the children,
providing medical inspection, authorizing the
feeding of the necessitous at the expense of the
ratepayers, helping them to obtain employ-
ment through free Labour Exchanges, seeking
to organize the labour market with a view to

158 LIBERALISM

the mitigation of unemployment, and provid-
ing old age pensions for all whose incomes fall
below thirteen shillings a week, without exact-
ing any contribution. Now, in all this, we may
well ask, is the State going forward blindly on
the paths of broad and generous but uncon-
sidered charity ? Is it and can it remain
indifferent to the effect on individual initiative
and personal or parental responsibility ? Or
may we suppose that the wiser heads are well
aware of what they are about, have looked at
the matter on all sides, and are guided by a
reasonable conception of the duty of the State
and the responsibilities of the individual ?
Are we, in fact — for this is really the question
— seeking charity or justice ?

We said above that it was the function of
the State to secure the conditions upon which
mind and character may develop themselves.
Similarly we may say now that the function of
the State is to secure conditions upon which its
citizens are able to win by their own efforts all
that is necessary to a full civic efficiency. It
is not for the State to feed, house, or clothe
them. It is for the State to take care that
the economic conditions are such that the
normal man who is not defective in mind or

STATE AND INDIVIDUAL 159

body or will can by useful labour feed, house,
and clothe himself and his family. The " right
to work " and the right to a " living wage "^
are just as valid as the rights of person or
property. That is to say, they are integral
conditions of a good social order. A society in
which a single honest man of normal capacity
is definitely unable to find the means of main-
taining himself by useful work is to that extent
suffering from malorganization. There is
somewhere a defect in the social system, a
hitch in the economic machine. Now, the in-
dividual workman cannot put the machine
straight. He is the last person to have any
say in the control of the market. It is not his
fault if there is over-production in his industry,
or if a new and cheaper process has been intro-
duced which makes his particular skill, per-
haps the product of years of application, a drug
in the market. He does not direct or regulate
industry. He is not responsible for its ups and
downs, but he has to pay for them. That is
why it is not charity but justice for which he
is asking. Now, it may be infinitely difficult
to meet his demand. To do so may involve a
far-reaching economic reconstruction. The
industrial questions involved may be so little

160 LIBERALISM

understood that we may easily make matters
worse in the attempt to make them better.
All this shows the difficulty in finding means
of meeting this particular claim of justice, but
it does not shake its position as a claim of
justice. A right is a right none the less though
the means of securing it be imperfectly known ;
and the workman who is unemployed or under-
paid through economic malorganization will
remain a reproach not to the charity but to
the justice of society as long as he is to be
seen in the land.

If this view of the duty of the State and the
right of the workman is coming to prevail,
it is owing partly to an enhanced sense of
common responsibility, and partly to the
teaching of experience. In the earlier days
of the Free Trade era, it was permissible to
hope that self-help would be an adequate
solvent, and that with cheap food and expand-
ing commerce the average workman would be
able by the exercise of prudence and thrift
not only to maintain himself in good times, but
to lay by for sickness, unemployment, and
old age. The actual course of events has in
large measure disappointed these hopes. It
is true that the standard of living in England

STATE AND INDIVIDUAL 161

has progressively advanced throughout the
nineteenth century. It is true, in particular;^
that, since the disastrous period that preceded'
the Repeal of the Corn Laws and the passing
of the Ten Hours' Act, social improvement has
been real and marked. Trade Unionism and
co-operation have grown, wages upon the
whole have increased, the cost of living has
diminished, housing and sanitation have
improved, the death rate has fallen from about
twenty-two to less than fifteen per thousand.
But with all this improvement the prospect
of a complete and lifelong economic independ-
ence for the average workman upon the lines
of individual competition, even when supple-
mented and guarded by the collective bargain-
ing of the Trade Union, appears exceedingly
remote. The increase of wages does not appear
to be by any means proportionate to the
general groA\'th of wealth. The whole standard
of living has risen; the very provision of educa-
tion has brought with it new needs and has
almost compelled a higher standard of life
in order to satisfy them. As a whole, the
working classes of England, though less thrifty
than those of some Continental countries,
cannot be accused of undue negligence with

F

162 LIBERALISM

xegard to the future. The accumulation of
savings in Friendly Societies, Trade Unions,
Co-operative Societies, and Savings Banks
shows an increase which has more than kept
pace with the rise in the level of wages; yet
there appears no likelihood that the average
manual worker will attain the goal of that
full independence, covering all the risks of
life for self and family, which can alone ren-
der the competitive system really adequate
to the demands of a civilized conscience. The
careful researches of Mr. Booth in London and
Mr. Rowntree in York, and of others in country
districts, have revealed that a considerable
percentage of the working classes are actually
unable to earn a sum of money representing
the full cost of the barest physical necessities
for an average family; and, though the bulk
of the working classes are undoubtedly in a
better position than this, these researches go
to show that even the relatively well-to-do
gravitate towards this line of primary poverty
in seasons of stress, at the time when the
children are still at school, for example, or
from the moment when the principal wage-
earner begins to fail, in the decline of middle
life. If only some ten per cent, of the popula-

STATE AND INDIVIDUAL 163

tion are actually living upon the poverty line
at any given time/ twice or three times that
number, it is reasonable to suppose, must
approach the line in one period or other of
their lives. But when we ascend from the
conception of a bare physical maintenance for
an average family to such a wage as would
provide the real minimum requirements of a
civilized life and meet all its contingencies
without having to lean on any external prop,
we should have to make additions to Mr.
Rowntree's figure which have not yet been
computed, but as to which it is probably well
within the mark to say that none but the most
highly skilled artisans are able to earn a
remuneration meeting the requirements of
the case. But, if that is so, it is clear that the
system of industrial competition fails to meet
the ethical demand embodied in the conception
of the " hving wage." That system holds
out no hope of an improvement which shall
bring the means of such a healthy and inde-
pendent existence as should be the birthright

* 1 do not include those living in " secondary poverty,"
as defined by Mr. Rowntree, as the responsibility in this
case is partly personal. It must, however, be remembered
that great poverty increases the difficulty of efficient
management

164 LIBERALISM

of every citizen of a free state within the grasp
of the mass of the people of the United King-
dom. It is this behef slowly penetrating
the public mind which has turned it to new
thoughts of social regeneration. The sum
and substance of the changes that I have
mentioned may be expressed in the principle
that the individual cannot stand alone, but
that between him and the State there is a
reciprocal obligation. He owes the State the
duty of industriously working for himself and
his family. He is not to exploit the labour of
his young children, but to submit to the public
requirements for their education, health, clean-
liness and general well-being. On the other
side society owes to him the means of main-
taining a civilized standard of life, and this
debt is not adequately discharged by leaving
him to secure such wages as he can in the
higgling of the market.

This view of social obligation lays increased
stress on public but by no means ignores
private responsibility. It is a simple prin-
ciple of applied ethics that responsibility
should be commensurate with power. Now,
given the opportunity of adequately re-
munerated work, a man has the power to

STATE AND INDIVIDUAL 165

earn his living. It is his right and his duty
to make the best use of his opportunity,
and if he fails he may fairly suffer the
penalty of being treated as a pauper or even,
in an extreme case, as a criminal. But the
opportunity itself he cannot command with
the same freedom. It is only within narrow
limits that it comes within the sphere of his
control. The opportunities of work and the
remuneration for work are determined by a
complex mass of social forces which no
individual, certainly no individual workman,
can shape. They can be controlled, if at all,
by the organized action of the community,
and therefore, by a just apportionment of
responsibihty, it is for the community to deal
with them.

But this, it will be said, is not Liberalism
but Socialism. Pursuing the economic rights of
the individual we have been led to contemplate
a Socialistic organization of industry. But a
word like Socialism has many meanings, and
it is possible that there should be a Liberal
Socialism, as well as a Socialism that is illiberal.
Let us, then, without sticking at a word, seek
to follow out the Liberal view of the State in
the sphere of economics. Let us try to

166 LIBERALISM |

determine in very general terms what is
involved in realizing those primary conditions
of industrial well-being which have been laid
down, and how they consort with the rights
of property and the claims of free industrial
enterprise.

CHAPTER VIII

ECONOMIC LIBERALISM

There are two forms of Socialism with
which Liberalism has nothing to do. These
I will call the mechanical and the official.
Mechanical Socialism is founded on a false
interpretation of history. It attributes the
phenomena of social life and development to
the sole operation of the economic factor,
whereas the beginning of sound sociology is
to conceive society as a whole in which all the
parts interact. The economic factor, to take
a single point, is at least as much the effect
as it is the cause of scientific invention.
There would be no world-wide system of
telegraphy if there was no need of world-wide
intercommunication. But there would be no
electric telegraph at all but for the scien-
tific interest which determined the experi-
ments of Gauss and Weber. Mechanical
Socialism, further, is founded on a false econo-
mic analysis which attributes all value to

167

168 LIBERALISM

labour, denying, confounding or distorting
the distinct functions of the direction of
enterprise, the unavoidable payment for the
use of capital, the productivity of nature,
and the very complex social forces which,
by determining the movements of demand
and supply actually fix the rates at which
goods exchange with one another. Politically,
mechanical Socialism supposes a class war,
resting on a clear-cut distinction of classes
which does not exist. Far from tending
to clear and simple lines of cleavage, modern
society exhibits a more and more complex
interweaving of interests, and it is impos-
sible for a modern revolutionist to assail
^' property " in the interest of " labour "
without finding that half the " labour " to
which he appeals has a direct or indirect inter-
est in " property." As to the future, mechan-
ical Socialism conceives a logically developed
system of the control of industry by govern-
ment. Of this all that need be said is that
the construction of Utopias is not a sound
method of social science; that this particular
Utopia makes insufficient provision for liberty,
movement, and growth; and that in order to
hiing his ideals into the region of practical

ECONOMIC LIBERALISM 169

discussion, what the Socialist needs is to formu-
late not a system to be substituted as a whole
for our present arrangements but a principle
to guide statesmanship in the practical work
of reforming what is amiss and developing
what is good in the actual fabric of industry.
A principle so applied grows if it has seeds of
good in it, and so in particular the collective
control of industry will be extended in pro-
portion as it is found in practice to yield good
results. The fancied clearness of Utopian
vision is illusory, because its objects are artifi-
cial ideas and not living facts. The " system "
of the world of books must be reconstructed
as a principle that can be applied to the rail-
way, the mine, the workshop, and the office
that we know, before it can even be sensibly
discussed. The evolution of Socialism as a
practical force in politics has, in point of fact,
proceeded by such a reconstruction, and this
change carries with it the end of the material-
istic Utopia.

Official Socialism is a creed of different
brand. Beginning with a contempt for ideals
of liberty based on a confusion between liberty
and competition, it proceeds to a measure
of contempt for average humanity in general.

F 2

170 LIBERALISM

It conceives mankind as in the mass a helpless
and feeble race, which it is its duty to treat
kindly. True kindness, of course, must be
combined with firmness, and the life of the
average man must be organized for his own
good. He need not know that he is being
organized. The socialistic organization will
work in the background, and there will be
wheels within wheels, or rather wires pulling
wires. Ostensibly there will be a class of the
elect, an aristocracy of character and intellect
which will fill the civil services and do the
practical work of administration. Behind
these will be committees of union and pro-
gress who will direct operations, and behind
the committees again one or more master
minds from whom will emanate the ideas
that are to direct the world. The play of
democratic government will go on for a time,
but the idea of a common will that should
actually undertake the organization of social
life is held the most childish of illusions. The
master minds can for the moment work more
easily through democratic forms, because
they are here, and to destroy them would
cause an upheaval. But the essence of govern-
ment lies in the method of capture. The

ECONOMIC LIBERALISM 171

ostensible leaders of democracy are ignorant
creatures who can with a little management
be set to walk in the way in which they should
go, and whom the crowd will follow like sheep.
The art of governing consists in making men
do what you wish without knowing what
they are doing, to lead them on without
showing them whither until it is too late for
them to retrace their steps. Socialism so
conceived has in essentials nothing to do
with democracy or with liberty. It is a
scheme of the organization of life by the
superior person, who will decide for each man
how he should work, how he should live, and
indeed, with the aid of the Eugenist, whether
he should live at all or whether he has any
business to be born. At any rate, if he ought
not to have been born — if, that is, he comes
of a stock whose qualities are not approved —
the Samurai will take care that he does not
perpetuate his race.

Now the average Liberal might have more
sympathy with this view of life if he did
not feel that for his part he is just a very
ordinary man. He is quite sure that he
cannot manage the lives of other people for
them. He finds it enough to manage his own.

172 LIBERALISM

But with the leave of the Superior he would
rather do this in his own way than in the way
of another, whose way may be much wiser but
is not his. He would rather marry the woman
of his own choice, than the one who would
be sure to bring forth children of the standard
type. He does not want to be standardized.
He does not conceive himself as essentially an
item in a census return. He does not want
the standard clothes or the standard food, he
wants the clothes which he finds comfortable
and the food which he hkes. With this
unregenerate Adam in him, I fear that the
Liberalism that is also within him is quite
ready to make terms. Indeed, it incites him to
go still further. It bids him consider that other
men are, on the whole, very like himself and
look on life in much the same way, and when it
speaks within him of social duty it encourages
him to aim not at a position of superiority
which will enable him to govern his fellow
creatures for their own good, but at a spirit
of comradeship in which he will stand shoulder
to shoulder with them on behalf of common

aims.

If, then, there be such a thing as a Liberal
Sociahsm — ^and whether there be is still a

ECONOMIC LIBERALISM 173

subject for inquiry — ^it must clearly fulfil two
conditions. In the first place, it must be
democratic. It must come from below, not
from above. Or rather, it must emerge from
the efforts of society as a whole to secure a
fuller measure of justice, and a better organiza-
tion of mutual aid. It must engage the efforts
and respond to the genuine desires not of a
handful of superior beings, but of great masses
of men. And, secondly, and for that very
reason, it must make its account with the
human individual. It must give the average
man free play in the personal life for which he
really cares. It must be founded on liberty,
and must make not for the suppression but for
the development of personality. How far, it
may be asked, are these objects compatible ?
How far is it possible to organize industry
in the interest of the common welfare without
either overriding the freedom of individual
choice or drying up the springs of initiative
and energy? How far is it possible to abolish
poverty, or to institute economic equality
without arresting industrial progress ? We
cannot put the question without raising more
fundamental issues. What is the real meaning
of " equality " in economics ? Would it mean,

174 LIBERALISM

for example, that all should enjoy equal re-
wards, or that equal efforts should enjoy equal
rewards, or that equal attainments should
enjoy equal rewards ? What is the province of
justice in economics ? Where does justice end
and charity begin ? And what, behind all this,
is the basis of property ? What is its social
function and value ? What is the measure of
consideration due to vested interest and pre-
scriptive right ? It is impossible, within the
hmits of a volume, to deal exhaustively with
such fundamental questions. The best course
will be to follow out the lines of development
which appear to proceed from those principles
of Liberalism which have been already
indicated and to see how far they lead to a
solution.

We saw that it was the duty of the State
to secure the conditions of self-maintenance
for the normal healthy citizen. There are
two lines along which the fulfilment of this
duty may be sought. One would consist in
providing access to the means of production,
the other in guaranteeing to the individual
a certain share in the common stock. In
point of fact, both lines have been followed
by Liberal legislation. On the one side this

ECONOMIC LIBERALISM 175

legislation has set itself, however timidly and
ineffectively as yet, to reversing the process
which divorced the English peasantry from
the soil. Contemporary research is making it
clear that this divorce was not the inevitable
result of slowly operating economic forces.
It was brought about by the deliberate policy
of the enclosure of the common fields begun
in the fifteenth century, partially arrested
from the middle of the sixteenth to the
eighteenth, and completed between the reigns
of George II and Queen Victoria. As this
process was furthered by an aristocracy, so
there is every reason to hope that it can
be successfully reversed by a democracy, and
that it will be possible to reconstitute a class
of independent peasantry as the backbone
of the working population. The experiment,
however, involves one form or another of
communal o^vnership. The labourer can
only obtain the land with the financial help of
the State, and it is certainly not the view of
Liberals that the State, having once regained
the fee simple, should part with it again. On
the contrary, in an equitable division of the
fruits of agriculture all advantages that are
derived from the qualities or position of the

176 LIBERALISM

soil itself, or from the enhancement of prices
by tariffs would, since they are the product
of no man's labour, fall to no man's share,
or, what is the same thing, they should fall to
every man, that is, to the community. This
is why Liberal legislation seeks to create a
class not of small landlords but of small
tenants. It would give to this class access
to the land and would reward them with the
fruits of their own work — and no more. The
surplus it would take to itself in the form
of rent, and while it is desirable to give the
State tenant full security against disturbance,
rents must at stated periods be adjustable
to prices and to cost. So, while Conserva-
tive policy is to establish a peasant proprietary
which would reinforce the voting strength
of property, the Liberal policy is to establish
a State tenantry from whose prosperity the
whole community would profit. The one
solution is individualist. The other, as far as
it goes, is nearer to the Socialist ideal.

But, though British agriculture may have
a great future before it, it will never regain its
dominant position in our economic life, nor
are small holdings ever likely to be the pre-
valent form of agriculture. The bulk of in-

ECONOMIC LIBERALISM 177

dustry is, and probably will be, more and more
in the hands of large undertakings with which
the individual workman could not compete
whatever instruments of production were
placed in his hands. For the mass of the
people, therefore, to be assured of the means
of a decent livelihood must mean to be as-
sured of continuous employment at a living
wage, or, as an alternative, of public assist-
ance. Now, as has been remarked, experience
goes to show that the wage of the average
worker, as fixed by competition, is not and is
not likely to become sufficient to cover all the
fortunes and misfortunes of life, to provide
for sickness, accident, unemployment and old
age, in addition to the regular needs of an
average family. In the case of accident the
State has put the burden of making provision
on the employer. In the case of old age it
has, acting, as I think, upon a sounder
principle, taken the burden upon itself. It
is very important to realize precisely what the
new departure involved in the Old Age Pen-
sions Act amounted to in point of principle.
The Poor Law already guaranteed the aged
person and the poor in general against actual
starvation. But the Poor Law came into

178 LIBERALISM

operation only at the point of sheer destitution.
It failed to help those who had helped them-
selves. Indeed, to many it held out little
inducement to help themselves if they could
not hope to lay by so much as would enable
them to live more comfortably on their means
than they would live in the workhouse.
The pension system throws over the test of
destitution. It provides a certain minimum,
a basis to go upon, a foundation upon which
independent thrift may hope to build up a
sufficiency. It is not a narcotic but a stimulus
to self help and to friendly aid or filial sup-
port, and it is, up to a limit, available for all
alike. It is precisely one of the conditions
of independence of which voluntary effort can
make use, but requiring voluntary effort to
make it fully available.

The suggestion underlying the movement for
the break up of the Poor Law is just the
general application of this principle. It is
that, instead of redeeming the destitute, we
should seek to render generally available the
means of avoiding destitution, though in doing
so we should uniformly call on the individual
for a corresponding effort on his part. One
method of meeting these conditions is to

ECONOMIC LIBERALISM 179

supply a basis for private effort to work upon,
as is done in the case of the aged. Another
method is that of State-aided insurance, and
on these Hues Liberal legislators have been
experimenting in the hope of dealing with
sickness, invalidity, and one portion of the
problem of unemployment. A third may
be illustrated by the method by which the
Minority of the Poor Law Commissioners
would deal with the case, at present so
often full of tragic import, of the widoAved or
deserted mother of young children. Hither-
to she has been regarded as an object of
charity. It has been a matter for the benevo-
lent to help her to retain her home, while it
has been regarded as her duty to keep " off
the rates " at the cost of no matter what
expenditure of labour away from home.
The newer conception of rights and duties
comes out clearly in the argument of the
commissioners, that if we take in earnest all
that we say of the duties and responsibilities
of motherhood, we shall recognize that the
mother of young children is doing better
service to the community and one more
worthy of pecuniary remuneration when she
stays at home and minds her children than

180 LIBERALISM

when she goes out charing and leaves them to
the chances of the street or to the perfunctory
care of a neighbour. In proportion as we
reahze the force of this argument, we reverse
our view as to the nature of public assistance
in such a case. We no longer consider it
desirable to drive the mother out to her charing
work if we possibly can, nor do we consider
her degraded by receiving public money. We
cease, in fact, to regard the public money as a
dole, we treat it as a payment for a civic
service, and the condition that we are inclined
to exact is precisely that she should not
endeavour to add to it by earning wages, but
rather that she should keep her home respect-
able and bring up her children in health and
happiness.

In defence of the competitive system two
arguments have been familiar from old days.
One is based on the habits of the working
classes. It is said that they spend their
surplus incomes on drink, and that if they have
no margin for saving, it is because they have
sunk it in the public-house. That argument,
is rapidly being met by the actual change of
habits. The wave of temperance which two
generations ago reformed the habits of the well-

ECONOMIC LIBERALISM 181

to-do in England is rapidly spreading thi'ough
all classes in our own time. The drink bill is
still excessive, the proportion of his weekly-
wages spent on drink by the average work-
man is stUl too great, but it is a diminishing
quantity, and the fear which might have been
legitimately expressed in old days that to add
to wages was to add to the drink bill could no
longer be felt as a valid objection to any
improvement in the material condition of the
working population in our own time. We no
longer find the drink bill heavily increasing
in years of commercial prosperity as of old.
The second argument has experienced an even
more decisive fate. Down to my own time
it was forcibly contended that any improve-
ment in the material condition of the mass of
the people would result in an increase of the
birth rate which, by extending the supply of
labour, would bring down wages by an auto-
matic process to the old level. There would
be more people and they would all be as miser-
able as before. The actual decline of the
birth rate, whatever its other consequences
may be, has driven this argument from the
field. The birth rate does not increase with
prosperity, but diminishes. There is no fear

182 LIBERALISM

of over-population ; if there is any present
danger, it is upon the other side. The fate of
these two arguments must be reckoned as a
very important factor in the changes of
opinion which we have noted.

Nevertheless, it may be thought that the
system that I have outlined is no better
than a vast organization of State charity,
and that as such it must carry the conse-
quences associated with charity on a large
scale. It must dry up the sources of energy
and undermine the independence of the indi-
vidual. On the first point, I have already
referred to certain cogent arguments for a
contrary view. What the State is doing,
what it would be doing if the whole series of
contemplated changes were carried through
to the end, would by no means suffice to meet
the needs of the normal man. He would still
have to labour to earn his own living. But
he would have a basis to go upon, a sub-
structure on which it would be possible for him
to rear the fabric of a real sufficiency. He
would have greater security, a brighter outlook,
a more confident hope of being able to keep
his head above water. The experience of life
suggests that hope is a better stimulus than

ECONOMIC LIBERALISM 183

fear, confidence a better mental environment
than insecurity. If desperation will some-
times spur men to exceptional exertion the
effect is fleeting, and, for a permanence, a more
stable condition is better suited to foster that
blend of restraint and energy which makes up
the tissue of a life of normal health. There
would be those who would abuse their advan-
tages as there are those who abuse every form
of social institution. But upon the whole it
is thought that individual responsibility can
be more clearly fixed and more rigorously
insisted on when its legitimate sphere is
properly defined, that is to say, when the
burden on the shoulders of the individual is
not too great for average human nature to
bear.

But, it may be urged, any reliance on ex-
ternal assistance is destructive of independence.
It is true that to look for support to private
philanthropy has this effect, because it makes
one man dependent on the good graces of
another. But it is submitted that a form of
support on which a man can count as a matter
of legal right has not necessarily the same
effect. Charity, again, tends to diminish the
value of independent effort because it flows in

184 LIBERALISM

the direction of the failures. It is a compen-
sation for misfortune which easily shdes into
an encouragement to carelessness. What is
matter of right, on the other hand, is enjoyed
equally by the successful and the unsuccessful.
It is not a handicap in favour of the one, but
an equal distance deducted from the race to
be run against fate by both. This brings us
to the real question. Are measures of the
kind under discussion to be regarded as
measures of philanthropy or measures of
justice, as the expression of collective benevo-
lence or as the recognition of a general right?
The full discussion of the question involves
complex and in some respects novel concep-
tions of economics and of social ethics to which
I can hardly do justice within the Hmits of
this chapter. But I will endeavour to indicate
in outline the conception of social and econo-
mic justice which underlies the movement
of modern Liberal opinion.

We may approach the subject by observing
that, whatever the legal theory, in practice the
existing Enghsh Poor Law recognizes the
right of every person to the bare necessaries of
life. The destitute man or woman can come
to a pubhc authority, and the public authority

ECONOMIC LIBERALISM 185

is bound to give him food and shelter. He has
to that extent a lien on the public resources
in virtue of his needs as a human being and
on no other ground. This lien, however, only
operates when he is destitute ; and he can only
exercise it by submitting to such conditions
as the authorities impose, which when the
workhouse test is enforced means loss of
liberty. It was the leading " principle of
1834 " that the lot of the pauper should be
made " less eligible " than that of the inde-
pendent labourer. Perhaps we may express
the change of opinion which has come about
in our day by saying that according to the
newer principle the duty of society is rather
to ensure that the lot of the independent
labourer be more eligible than that of the
pauper. With this object the lien on the
common wealth is enlarged and reconstituted.
Its exercise does not entail the penal conse-
quence of the loss of freedom unless there is
proved misfeasance or neglect on the part of
the individual. The underlying contention is
that, in a State so wealthy as the United
Kingdom, every citizen should have full means
of earning by socially useful labour so much
material support as experience proves to be

186 LIBERALISM

the necessary basis of a healthy, civilized
existence. And if in the actual working of the
industrial system the means are not in actual
fact sufficiently available he is held to have a
claim not as of charity but as of right on the
national resources to make good the deficiency.
That there are rights of property we all
admit. Is there not perhaps a general right to
property ? Is there not something radically
wrong with an economic system under which
through the laws of inheritance and bequest
vast inequalities are perpetuated ? Ought we
to acquiesce in a condition in which the great
majority are born to nothing except what they
can earn, while some are born to more than
the social value of any individual of whatever
merit? May it not be that in a reasoned
scheme of economic ethics we should have to
allow a true right of property in the member
of the community as such which would take
the form of a certain minimum claim on the
public resources ? A pretty idea, it may be
said, but ethics apart, what are the resources
on which the less fortunate is to draw ? The
British State has little or no collective property
available for any such purpose. Its revenues
are based on taxation, and in the end what all

ECONOMIC LIBERALISM 187

this means is that the rich are to be taxed for

the benefit of the poor, which we may be told is

neither justice nor charity but sheer spoHation.

To this I would reply that the depletion of

public resources is a symptom of profound

economic disorganization. Wealth, I would

contend, has a social as well as a personal basis.

Some forms of wealth, such as ground rents in

and about cities, are substantially the creation

of society, and it is only through the misfeasance

of government in times past that such wealth

has been allowed to fall into private hands.

Other great sources of wealth are found in

financial and speculative operations, often of

distinctly anti-social tendency and possible

only through the defective organization of our

economy. Other causes rest in the partial

monopolies which our liquor laws, on the one

side, and the old practice of allowing the supply

of municipal services to fall into private hands

have built up. Through the principle of

inheritance, property so accumulated is handed

on; and the result is that while there is a small

class born to the inheritance of a share in the

material benefits of civilization, there is a

far larger class which can say " naked we

enter, naked we leave." This system, as a

188 LIBERALISM

whole, it is maintained, requires revision.
Property in this condition of things ceases, it
is urged, to be essentially an institution by
which each man can secure to himself the
fruits of his own labour, and becomes an
instrument whereby the owner can command
the labour of others on terms which he is in
general able to dictate. This tendency is held
to be undesirable, and to be capable of a remedy
through a concerted series of fiscal, industrial,
and social measures which would have the
effect of augmenting the common stock at the
disposal of society, and so applying it as to
secure the economic independence of all who
do not forfeit their advantages by idleness,
incapacity, or crime. There are early forms
of communal society in which each person
is born to his appropriate status, carrying
its appropriate share of the common land.
In destroying the last relics of this system
economic individualism has laid the basis
of great material advances, but at great
cost to the happiness of the masses. The
ground problem in economics is not to de-
stroy property, but to restore the social con-
ception of property to its right place under
conditions suitable to modern needs. This is

ECONOMIC LIBERALISM 189

not to be done by crude measures of redistribu-
tion, such as those of which we hear in ancient
history. It is to be done by distinguishing
the social from the individual factors in wealth,
by bringing the elements of social wealth into
the public coffers, and by holding it at the
disposal of society to administer to the prime
needs of its members.

The basis of property is social, and that in
two senses. On the one hand, it is the organ-
ized force of society that maintains the rights
of owners by protecting them against thieves
and depredators. In spite of all criticism
many people still seem to speak of the rights of
property as though they were conferred bj;
Nature or by Providence upon certain fortun-
ate individuals, and as though these individuals
had an unlimited right to command the State,
as their servant, to secure them by the free
use of the machinery of law in the undisturbed
enjoyment of their possessions. They forget
that without the organized force of society
their rights are not worth a week's purchase.
They do not ask themselves where they would
be without the judge and the policeman and
the settled order which society maintains. The
prosperous business man who thinks that he

190 LIBERALISM

has made his fortune entirely by self help does
not pause to consider what single step he could
have taken on the road to his success but for
the ordered tranquillity which has made
commercial development possible, the security
by road, and rail, and sea, the masses of skilled
labour, and the sum of intelligence which
civilization has placed at his disposal, the
very demand for the goods which he produces
which the general progress of the world has
created, the inventions which he uses as a
matter of course and which have been built up
by the collective effort of generations of men
of science and organizers of industry. If he
dug to the foundations of his fortune he would
recognize that, as it is society that maintains
and guarantees his possessions, so also it is
society which is an indispensable partner in
its original creation.

This brings us to the second sense in
which property is social. There is a social
element in value and a social element in pro-
duction. In modern industry there is very
little that the individual can do by his
unaided efforts. Labour is minutely divided;
and in proportion as it is divided it is forced
to be co-operative. Men produce goods to

ECONOMIC LIBERALISM 191

sell, and the rate of exchange, that is, price, is
fixed by relations of demand and supply the
rates of which are determined by complex
social forces. In the methods of production
every man makes use, to the best of his ability,
of the whole available means of civilization,
of the machinery which the brains of other
men have devised, of the human apparatus
which is the gift of acquired civilization.
Society thus provides conditions or oppor-
tunities of which one man will make much
better use than another, and the use to which
they are put is the individual or personal
element in production which is the basis of the
personal claim to reward. To maintain and
stimulate this personal effort is a necessity
of good economic organization, and without
asking here whether any particular conception
of Socialism would or would not meet this need
we may lay down with confidence that no
form of Socialism which should ignore it could
possibly enjoy enduring success. On the
other hand, an individualism which ignores the
social factor in wealth will deplete the national
resources, deprive the community of its just
share in the fruits of industry and so result in
a one-sided and inequitable distribution of

192 LIBERALISM

wealth. Economic justice is to render what
is due not only to each individual but to
each function, social or personal, that is
engaged in the performance of useful service,
and this due is measured by the amount
necessary to stimulate and maintain the
efficient exercise of that useful function. This
equation between function and sustenance is
the true meaning of economic equality.

Now to apply this principle to the adjust-
ment of the claims of the community on the
one hand and the producers or inheritors of
wealth on the other would involve a discrimina-
tion of the factors of production which is not
easy to make in all instances. If we take the
case of urban land, referred to above, the
distinction is tolerably clear. The value of a
site in London is something due essentially
to London, not to the landlord. More accur-
ately a part of it is due to London, a part to
the British empire, a part, perhaps we should
say, to Western civilization. But while it
would be impossible to disentangle these
subsidiary factors, the main point that the
entire increment of value is due to one social
factor or another is sufficiently clear, and this
explains why Liberal opinion has fastened on,

ECONOMIC LIBERALISM 193

the conception of site value as being by right
communal and not personal property. The
monopoly value of licensed premises, which is
the direct creation of laws passed for the control
of the liquor traffic, is another case in point.
The difficulty which society finds in dealing
with these cases is that it has allowed these
sources of wealth to pass out of its hands, and
that property of these kinds has freely passed
from one man to another in the market, in the
belief that it stood and would stand on the
same basis in law as any other. Hence, it is
not possible for society to insist on the whole
of its claim. It could only resume its full
rights at the cost of great hardship to indi-
viduals and a shock to the industrial system.
What it can do is to shift taxation step by step
from the wealth due to individual enterprise
to the wealth that depends on its own collec-
tive progress, thus by degrees regaining the
ownership of the fruits of its own collective
work.

Much more difficult in principle is the
question of the more general elements of social
value which run through production as a
whole. We are dealing here with factors so
intricately interwoven in their operation that

G

194 LIBERALISM

they can only be separated by an indirect
process. What this process would be we may
best understand by imagining for a moment a
thoroughgoing centralized organization of the
industrial system endeavouring to carry out
the principles of remuneration outlined above.
The central authority which we imagine as
endowed with such wisdom and justice as to
find for every man his right place and to assign
to every man his due reward would, if our
argument is sound, find it necessary to assign
to each producer, whether working with hand
or brain, whether directing a department of
industry or serving under direction, such
remuneration as would stimulate him to put
forth his best efforts and would maintain him
in the condition necessary for the life-long
exercise of his function. If we are right in
considering that a great part of the wealth
produced from year to year is of social origin,
it would follow that, after the assignment of
this remuneration, there woiild remain a
surplus, and this would fall to the coffers of
the community and be available for public
purposes, for national defence, public works,
education, charity, and the furtherance of
civilized life.

ECONOMIC LIBERALISM 195

Now, this is merely an imaginary picture,
and I need not ask whether such a measure of
wisdom on the part of a Government is practi-
cally attainable, or whether such a measure
of centralization might not carry consequences
which would hamper progress in other direc-
tions. The picture serves merely to illus-
trate the principles of equitable distribution
by which the State should be guided in deal-
ing with property. It serves to define our
conception of economic justice, and there-
with the lines on which we should be guided
in the adjustment of taxation and the re-'
organization of industry. I may illustrate
its bearing by taking a couple of cases.

One important source of private wealth
under modern conditions is speculation. Is
this also a source of social wealth ? Does it
produce anything for society ? Does it per-
form a function for which our ideal adminis-
tration would think it necessary to pay ?
I buy some railway stock at 110. A year or
two later I seize a favourable opportunity
and sell it at 125. Is the increment earned
or unearned ? The answer in the single case
is clear, but it may be said that my good for-
txme in this case may be balanced by ill luck

196 LIBERALISM

in another. No doubt. But, to go no further,
if on balance I make a fortune or an income by
this method it would seem to be a fortune or
an income not earned by productive service.
To this it may be replied that the buyers and
sellers of stocks are indirectly performing the
function of adjusting demand and supply,
and so regulating industry. So far as they
are expert business men trained in the know-
ledge of a particular market this may be so.
So far as they dabble in the market in the
hope of profiting from a favourable turn,
they appear rather as gamblers. I will not
pretend to determine which of the two is the
larger class. I would point out only that, on
the face of the facts, the profits derived from
this particular source appear to be rather of
the nature of a tax which astute or fortunate
individuals are able to levy on the producer
than as the reward which they obtain for a
definite contribution on their own part to
production. There are two possible empirical
tests of this view. One is that a form of
collective organization should be devised which
should diminish the importance of the specu-
lative market. Our principle would suggest
the propriety of an attempt in that direction

ECONOMIC LIBERALISM 197

whenever opportunity offers. Another would
be the imposition of a special tax on incomes
derived from this source, and experience
would rapidly show whether any such tax
would actually hamper the process of pro-
duction and distribution at any stage. If
not, it would justify itself. It would prove
that the total profit now absorbed by in-
dividuals exceeds, at least by the amount
of the tax, the remuneration necessary
to maintain that particular economic func-
tion.

The other case I will take is that of in-
herited wealth. This is the main determining
factor in the social and economic structure
of our time. It is clear on our principle that
it stands in quite a different position from
that of wealth which is being created from
day to day. It can be defended only on
two grounds. One is prescriptive right,
and the difficulty of disturbing the basis of
the economic order. This provides an un-
answerable argument against violent and
hasty methods, but no argument at all against
a gentle and slow-moving policy of economic
reorganization. The other argument is that
inherited wealth serves several indirect func-

198 LIBERALISM

tions. The desire to provide for children
and to found a family is a stimulus to effort.
The existence of a leisured class affords possi-
bilities for the free development of originality,
and a supply of disinterested men and women
for the service of the State. I would suggest
once again that the only real test to which the
value of these arguments can be submitted
is the empirical test. On the face of the facts
inherited wealth stands on a different footing
from acquired wealth, and Liberal policy is
on the right lines in beginning the discrimina-
tion of earned from unearned income. The
distinction is misconceived only so far as
income derived from capital or land may
represent the savings of the individual and
not his inheritance. The true distinction is
between the inherited and the acquired, and
while the taxation of acquired wealth may
operate, so far as it goes, to diminish the
profits, and so far to weaken the motive
springs, of industry, it is by no means self-
evident that any increase of taxation on in-
herited wealth would necessarily have that
effect, or that it would vitally derange any
other social function. It is, again, a matter
on which only experience can decide, but if

ECONOMIC LIBERALISM 199

experience goes to show that we can impose
a given tax on inherited wealth without
diminishing the available supply of capital
and without losing any service of value, the
result would be net gain. The State could
never be the sole producer, for in production
the personal factor is vital, but there is no
limit set by the necessities of things to the
extension of its control of natural resources,
on the one hand, and the accumulated heritage
of the past, on the other.

If Liberal policy has committed itself
not only to the discrimination of earned and
unearned incomes but also to a super-tax on
large incomes from whatever source, the
ground principle, again, I take to be a re-
spectful doubt whether any single individual
is worth to society by any means as much as
some individuals obtain. We might, indeed,
have to qualify this doubt if the great fortunes
of the world fell to the great geniuses. It
would be impossible to determine what we
ought to pay for a Shakespere, a Browning,
a Newton, or a Cobden. Impossible, but for-
tunately unnecessary. For the man of genius
is forced by his own cravings to give, and the
only reward that he asks from society is to be

200 LIBERALISM

let alone and have some quiet and fresh air.
Nor is he in reality entitled, notwithstanding
his services, to ask more than the modest
sufficiency which enables him to obtain those
primary needs of the life of thought and
creation, since his creative energy is the
response to an inward stimulus which goads
him on without regard to the wishes of any
one else. The case of the great organizers
of industry is rather different, but they, again,
so far as their work is socially sound, are
driven on more by internal necessity than by
the genuine love of gain. They make great
profits because their works reach a scale at
which, if the balance is on the right side at
all, it is certain to be a big balance, and they
no doubt tend to be interested in money as
the sign of their success, and also as the basis
of increased social power. But I believe the
direct influence of the lust of gain on this
type of mind to have been immensely ex-
aggerated; and as proof I would refer, first, to
the readiness of many men of this class to
accept and in individual cases actively to
promote measures tending to diminish their
material gain, and, secondly, to the mass of
high business capacity which is at the com-

ECONOMIC LIBERALISM 201

mand of the public administration for salaries
which, as their recipient must be perfectly
conscious, bear no relation to the income
which it would be open to him to earn in
commercial competition.

On the whole, then, we may take it that the
principle of the super-tax is based on the
conception that when we come to an income
of some £5,000 a year we approach the limit
of the industrial value of the individual.^ We
are not likely to discourage any service of
genuine social value by a rapidly increasing
surtax on incomes above that amount. It
is more likely that we shall quench the anti-
social ardour for unmeasured wealth, for
social power, and the vanity of display.

These illustrations may suffice to give some
concreteness to the conception of economic
justice as the maintenance of social function.

^ It is true that so long as it remains possible for a
certain order of ability to earn £50,000 a year, the com-
munity will not obtain its services for £5,000. But if
things should be so altered by taxation and economic re-
organization that £5,000 became in practice the highest
limit attainable, and remained attainable even for the
ablest only by effort, there is no reason to doubt that that
eifort would be forthcoming. It is not the absolute amount
of remuneration, but the increment of remuneration in
proportion to the output of industrial or commercial
capacity, which serves as the needed stimulus to energy.
G 2

202 LIBERALISM

They serve also to show that the true resources
of the State are larger and more varied than
is generally supposed. The true function of
taxation is to secure to society the element
in wealth that is of social origin, or, more
broadly, all that does not owe its origin to the
efforts of living individuals. When taxation,
based on these principles, is utilized to secure
healthy conditions of existence to the mass of
the people it is clear that this is no case of
robbing Peter to pay Paul. Peter is not
robbed. Apart from the tax it is he who
would be robbing the State. A tax which
enables the State to secure a certain share
of social value is not something deducted
from that which the taxpayer has an unlimited
right to call his own, but rather a repayment
of something which was all along due to
society.

But why should the proceeds of the tax
go to the poor in particular ? Granting that
Peter is not robbed, why should Paul be paid ?
Why should not the proceeds be expended
on something of common concern to Peter
and Paul alike, for Peter is equally a member
of the community ? Undoubtedly the only
just method of dealing with the common

ECONOMIC LIBERALISM 203

funds is to expend them in objects which
subserve the common good, and there are
many directions in which pubhc expenditure
does in fact benefit all classes alike. This,
it is worth noting, is true even of some
important branches of expenditure which in
their direct aim concern the poorer classes.
Consider, for example, the value of public
sanitation, not merely to the poorer regions
which would suffer first if it were withheld,
but to the richer as well who, seclude them-
selves as they may, cannot escape infection.
In the old days judge and jury, as well as
prisoners, would die of gaol fever. Consider,
again, the economic value of education, not
only to the worker, but to the employer whom
he will serve. But when all this is allowed
for it must be admitted that we have through-
out contemplated a considerable measure of
public expenditure in the elimination of
poverty. The prime justification of this
expenditure is that the prevention of suffering
from the actual lack of adequate physical
comforts is an essential element in the common
good, an object in which all are bound to
concern themselves, which all have the right
to demand and the duty to fulfil. Any com-

204 LIBERALISM

mon life based on the avoidable suffering
even of one of those who partake in it is a
life not of harmony, but of discord.

But we can go further. We said at the
outset that the function of society was to
secure to all normal adult members the means
of earning by useful work the material
necessaries of a healthy and efficient life.
We can see now that this is one case and,
properly understood, the largest and most
far reaching case falling under the general
principle of economic justice. This principle
lays down that every social function must
receive the reward that is sufficient to stimu-
late and maintain it through the life of the
individual. Now, how much this reward
may be in any case it is probably impossible
to determine otherwise than by specific ex-
periment. But if we grant, in accordance
with the idea with which we have been
working all along, that it is demanded of
all sane adult men and women that they
should live as civilized beings, as industrious
workers, as good parents, as orderly and
efficient citizens, it is, on the other side, the
function of the economic organization of
society to secure them the material means

ECONOMIC LIBERALISM 205

of living such a life, and the immediate duty
of society is to mark the points at which such
means fail and to make good the deficiency.
Thus the conditions of social efficiency mark
the minimum of industrial remuneration, and
if they are not secured without the deliberate
action of the State they must be secured by
means of the deliberate action of the State.
If it is the business of good economic organiza-
tion to secure the equation between function
and maintenance, the first and greatest ap-
plication of this principle is to the primary
needs. These fix the minimum standard of
remuneration beyond which we require
detailed experiment to tell us at what rate
increased value of service rendered necessi-
tates corresponding increase of reward.

It may be objected that such a standard is
unattainable. There are those, it may be
contended, who are not, and never will be,
worth a full efficiency wage. Whatever is
done to secure them such a remuneration
will only involve net loss. Hence it violates
our standard of economic justice. It involves
payment for a function of more than it is
actually worth, and the discrepancy might
be so great as to cripple society. It must.

206 LIBERALISM

of course, be admitted that the population
contains a certain percentage of the physically
incapable, the mentally defective, and the
morally uncontrolled. The treatment of
these classes, all must agree, is and must be
based on other principles than those of
economics. One class requires punitive dis-
cipline, another needs life-long care, a third —
the mentally and morally sound but physically
defective — must depend, to its misfortune, on
private and public charity. There is no
question here of payment for a function, but
of ministering to human suffering. It is, of
course, desirable on economic as well as on
broader grounds that the ministration should
be so conceived as to render its object as nearly
as possible independent and self-supporting.
But in the main all that is done for these
classes of the population is, and must be, a
charge on the surplus. The real question
that may be raised by a critic is whether the
considerable proportion of the working class
whose earnings actually fall short, as we should
contend, of the minimum, could in point of
fact earn that minimum. Their actual value,
he may urge, is measured by the wage which

ECONOMIC LIBERALISM 207

they do in fact command in the competitive
market, and if their wage falls short of the
standard society may make good the defi-
ciency if it will and can, but must not shut
its eyes to the fact that in doing so it is per-
forming, not an act of economic justice, but of
charity. To this the reply is that the price
which naked labour without property can
command in bargaining with employers who
possess property is no measure at all of the
addition which such labour can actually
make to wealth. The bargain is unequal, and
low remuneration is itself a cause of low effi-
ciency which in turn tends to react unfavour-
ably on remuneration. Conversely, a general
improvement in the conditions of life reacts
favourably on the productivity of labour.
Real wages have risen considerably in the
last half century, but the income-tax returns
indicate that the wealth of the business and
professional man has increased even more
rapidly. Up to the efficiency minimum there
is, then, every reason to think that a general
increase of wages would positively increase
the available surplus whether that surplus goes
to individuals as profits or to the State as

208 LIBERALISM

national revenue. The material improvement
of working-class conditions will more than
pay its way regarded purely as an economic
investment on behalf of society.

This conclusion is strengthened if we con-
sider narrowly what elements of cost the " liv-
ing wage " ought in principle to cover. We
are apt to assume uncritically that the wages
earned by the labour of an adult man ought
to suffice for the maintenance of an average
family, providing for all risks. It ought, we
think, to cover not only the food and clothing
of wife and children, but the risks of sickness,
accident, and unemployment. It ought to
provide for education and lay by for old age.
If it fails we are apt to think that the wage
earner is not self supporting. Now, it is
certainly open to doubt whether the actual
addition to wealth made by an unskilled
labourer denuded of all inherited property
would equal the cost represented by the sum
of these items. But here our further principle
comes into play. He ought not to be denuded
of all inherited property. As a citizen he
should have a certain share in the social
inheritance. This share should be his support

ECONOMIC LIBERALISM 209

in the times of misfortune, of sickness, and of
worklessness, whether due to economic dis-
organization or to invalidity and old age. His
children's share, again, is the State-provided
education. These shares are charges on the
social surplus. It does not, if fiscal arrange-
ments are what they should be, infringe
upon the income of other individuals, and
the man who without further aid than the
universally available share in the social in-
heritance which is to fall to him as a citizen
pays his way through life is to be justly
regarded as self-supporting.

The central point of Liberal economics, then,
is the equation of social service and reward.
This is the principle that every function of
social value requires such remuneration as
serves to stimulate and maintain its effective
performance; that every one who performs
such a function has the right, in the strict
ethical sense of that term, to such remuneration
and to no more; that the residue of existing
wealth should be at the disposal of the com-
munity for social purposes. Further, it is
the right, in the same sense, of every person
capable of performing some useful social func-

210 LIBERALISM

tion that he should have the opportunity of
so doing, and it is his right that the remuner-
ation that he receives for it should be
his property, i. e. that it should stand at
his free disposal enabling him to direct his
personal concerns according to his own pre-
ferences. These are rights in the sense that
they are conditions of the welfare of its
members which a well-ordered State will
seek by every means to fulfil. But it is
not suggested that the way of such fulfil-
ment is plain, or that it could be achieved at a
stroke by a revolutionary change in the tenure
of property or the system of industry. It is,
indeed, implied that the State is vested with a
certain overlordship over property in general
and a supervisory power over industry in
general, and this principle of economic sove-
reignty may be set side by side with that of
economic justice as a no less fundamental con-
ception of economic Liberalism. For here,
as elsewhere, liberty implies control. But the
manner in which the State is to exercise its
controlling power is to be learnt by experience
and even in large measure by cautious experi-
ment. We have sought to determine the prin-

ECONOMIC LIBERALISM 211

ciple which should guide its action, the ends
at which it is to aim. The systematic study
of the means lies rather within the province of
economics; and the teaching of history seems
to be that progress is more continuous and
secure when men are content to deal with
problems piecemeal than when they seek to
destroy root and branch in order to erect a
complete system which has captured the
imagination.

It is evident that these conceptions embody
many of the ideas that go to make up the
framework of Socialist teaching, though they
also emphasize elements of individual right
and personal independence, of which Socialism
at times appears oblivious. The distinction
that I would claim for economic Liberalism is
that it seeks to do justice to the social and
individual factors in industry alike, as opposed
to an abstract Socialism which emphasizes the
one side and an abstract Individualism which
leans its whole weight on the other. By keep-
ing to the conception of harmony as our clue
we constantly define the rights of the indi-
vidual in terms of the common good, and think
of the common good in terms of the welfare of

212 LIBERALISM

all the individuals who constitute a society.
Thus in economics we avoid the confusion of
liberty with competition, and see no virtue in
the right of a man to get the better of others.
At the same time we are not led to minimize the
share of personal initiative, talent, or energy
in production, but are free to contend for their
claim to adequate recognition, A Socialist
who is convinced of the logical coherence and
practical applicability of his system may dis-
miss such endeavours to harmonize divergent
claims as a half-hearted and illogical series of
compromises. It is equally possible that a
Socialist who conceives Socialism as consisting
in essence in the co-operative organization of
industry by consumers, and is convinced that
the full solution of industrial problems lies in
that direction, should in proportion as he con-
siders the psychological factors in production
and investigates the means of realizing his
ideal, find himself working back along the path
to a point where he will meet the men who are
grappling with the problems of the day on the
principles here suggested, and will find himself
able to move forward in practice in the front
ranks of economic Liberalism. If this is so,
the growing co-operation of political Liberalism

ECONOMIC LIBERALISM 213

and Labour, which in the last few years has
replaced the antagonism of the 'nineties, is
no mere accident of temporary political con-
venience, but has its roots deep in the neces-
sities of Democracy.

CHAPTER IX

THE FUTURE OF LIBERALISM

The nineteenth century might be called
the age of Liberalism, yet its close saw the
fortunes of that great movement brought to
their lowest ebb. Whether at home or abroad
those who represented Liberal ideas had suf-
fered crushing defeats. But this was the least
considerable of the causes for anxiety. If
Liberals had been defeated, something much
worse seemed about to befall Liberalism. Its
faith in itself was waxing cold. It seemed to
have done its work. It had the air of a creed
that is becoming fossilized as an extinct form,
a fossil that occupied, moreover, an awkward
position between two very active and energeti-
cally moving grindstones — the upper grind-
stone of plutocratic imperialism, and the nether
grindstone of social democracy. " We know
all about you," these parties seemed to say to
Liberalism; " we have been right through you

214

THE FUTURE OF LIBERALISM 215

and come out on the other side. Respectable
platitudes, you go maundering on about Cob-
den and Gladstone, and the liberty of the
individual, and the rights of nationality, and
government by the people. What you say
is not precisely untrue, but it is unreal and
uninteresting." So far in chorus. " It is not
up to date," finished the Imperialist, and
the Socialist bureaucrat. " It is not bread
and butter," finished the Social democrat.
Opposed in everything else, these two parties
agreed in one thing. They were to divide
the future between them. Unfortunately,
however, for their agreement, the division
was soon seen to be no equal one. What-
ever might be the ultimate recuperative power
of Social Democracy, for the time being,
in the paralysis of Liberalism, the Imperial
reaction had things all to itself. The govern-
ing classes of England were to assert them-
selves. They were to consolidate the Empire,
incidentally passing the steam roller over two
obstructive republics. They were to " teach
the law " to the " sullen new-caught peoples "
abroad. They were to re-estabUsh the Church
at home by the endowment of doctrinal educa-
tion. At the same time they were to establish

216 LIBERALISM

the liquor interest — which is, after all, the
really potent instrument of government from
above. They were to bind the colonies to us
by ties of fiscal preference, and to establish
the great commercial interests on the basis of
protection. Their government, as conceived
by the best exponents of the new doctrine, was
by no means to be indifferent to the humani-
tarian claims of the social conscience. They
were to deal out factory acts, and establish
wages boards. They were to make an efRcient
and a disciplined people. In the idea of dis-
cipline the military element rapidly assumed
a greater prominence. But on this side the
evolution of opinion passed through two well-
marked phases. The first was the period of
optimism and expansion. The Englishman
was the born ruler of the world. He might
hold out a hand of friendship to the German
and the American, whom he recognized as his
kindred and who lived within the law. The
rest of the world was peopled by dying nations
whose manifest destiny was to be " adminis-
tered " by the coming races, and exploited by
their commercial syndicates. This mood of
optimism did not survive the South African
War. It received its death-blow at Colenso

THE FUTURE OF LIBERALISM 217

and Magersfontein, and within a few years fear
had definitely taken the place of ambition as
the mainspring of the movement to national
and imperial consolidation. The Tariff Re-
form movement was largely inspired by a
sense of insecurity in our commercial position.
The half-patronizing friendship for Germany
rapidly gave way, first to commercial jealousy,
and then to unconcealed alarm for our national
safety. All the powers of society were bent
on lavish naval expenditure, and of imposing
the idea of compulsory service on a reluctant
people. The disciplined nation was needed
no longer to dominate the world, but to main-
tain its own territory.

Now, we are not concerned here to follow
up the devious windings of modern Conservat-
ism. We have to note only that what modern
democracy has to face is no mere inertia of
tradition. It is a distinct reactionary policy
with a definite and not incoherent creed of its
own, an ideal which in its best expression — for
example, in the daily comments of the Morning
Post — is certain to exercise a powerful attrac-
tion on many generous minds — the ideal of
the efficient, disciplined nation, centre and
dominating force of a powerful, self-contained,

218 LIBERALISM

militant empire. What concerns us more
particularly is the reaction of Conservative
development upon the fortunes of democracy.
But to understand this reaction, and, indeed,
to make any sound estimate of the present
position and prospects of Liberalism, we must
cast a rapid glance over the movement of
progressive thought during the last generation.
When Gladstone formed his second Govern-
ment in 1880 the old party system stood secure
in Great Britain. It was only a band of
politicians from the other side of St. George's
Channel who disowned both the great alle-
giances. For the British political mind the
plain distinction of Liberal and Conservative
held the field, and the division was not yet a
class distinction. The great Whig families
held their place, and they of the aristocratic
houses divided the spoil. But a new leaven
was at work. The prosperity which had
culminated in 1872 was passing away. Indus-
trial progress slowed down; and, though the
advance from the "' Hungry 'Forties " had
been immense, men began to see the limit of
what they could reasonably expect from
retrenchment and Free Trade. The work of
Mr. Henry George awakened new interest in

THE FUTURE OF LIBERALISM 219

problems of poverty, and the idealism of
William Morris gave new inspiration to Socialist
propaganda. Meanwhile, the teaching of
Green and the enthusiasm of Toynbee were
setting Liberalism free from the shackles of
an individualist conception of liberty and
paving the way for the legislation of our own
time. Lastly, the Fabian Society brought
Socialism down from heaven and established
a contact with practical politics and municipal
government. Had Great Britain been an
island in the mid-Pacific the onward movement
would have been rapid and undeviating in its
course. As it was, the new ideas were re-
flected in the parliament and the cabinet of
1880-1885, and the Radicalism of Birmingham
barely kept on terms with the Whiggery of
the clubs. A redistribution of social forces
which would amalgamate the interests of
" property " on the one side and those of
democracy on the other was imminent, and
on social questions democracy reinforced by
the enfranchisement of the rm-al labourers
in 1884 stood to win. At this stage the Irish
question came to a head. Mr. Gladstone
declared for Home Rule, and the party fissure
took place on false lines. The upper and

220 LIBERALISM

middle classes in the main went over to Union-
ism, but they took with them a section of the
Radicals, while Mr. Gladstone's personal force
retained on the Liberal side a number of
men whose insight into the needs of democracy
was by no means profound. The political
fight was for the moment shifted from the
social question to the single absorbing issue
of Home Rule, and the new Unionist party
enjoyed twenty years of almost unbroken
supremacy. Again, had the Home Rule issue
stood alone it might have been settled in
1892, but meanwhile in the later 'eighties the
social question had become insistent. Social-
ism, ceasing to be a merely academic force, had
begun to influence organized labour, and had
inspired the more generous minds among the
artisans with the determination to grapple with
the problem of the unskilled workmen. From
the Dockers' strike of 1889 the New Unionism
became a fighting force in public affairs, and
the idea of a Labour party began to take shape.
On the new problems Liberalism, weakened as
it already had been, was further divided, and
its failure in 1892 is to be ascribed far more to
this larger cause than to the dramatic personal
incident of the Parnell divorce. In office

THE FUTURE OF LIBERALISM 221

without legislative power from 1892 to 1895,
the Liberal party only experienced further loss
of credit, and the rise of Imperialism swept
the whole current of public interest in a new
direction. The Labour movement itself was
paralyzed, and the defeat of the Engineers in
1897 put an end to the hope of achieving a great
social transformation by the method of the
strike. But, in the meanwhile, opinion was
being silently transformed. The labours of
Mr. Charles Booth and his associates had at
length stated the problem of poverty in
scientific terms. Social and economic history
was gradually taking shape as a virtually new
branch of knowledge. The work of Mr. and
Mrs. Sidney Webb helped to clear up the
relations between the organized efforts of
workmen and the functions of the State.
The discerning observer could trace the
" organic filaments " of a fuller and more
concrete social theory.

On the other hand, in the Liberal ranks
many of the most influential men had passed,
without consciousness of the transition, under
the sway of quite opposite influences. They
were becoming Imperialists in their sleep, and
it was only as the implications of Imperialism

222 LIBERALISM

became evident that they were awakened. It
was with the outbreak of the South African
War that the new development of Conservative
policy first compelled the average Liberal to
consider his position. It needed the shock of
an outspoken violation of right to stir him;
and we may date the revival of the idea of jus-
tice in the party as an organized force from
the speech in the summer of 1901 in which
Sir Henry Campbell-Bannerman set himself
against the stream of militant sentiment and
challenged in a classic phrase the methods of
the war. From the day of this speech, which
was supposed at the time to have irretrievably
ruined his political career, the name of the
party-leader, hitherto greeted with indifference,
became a recognized signal for the cheers of
a political meeting, and a man with no marked
genius but that of character and the insight
which character gave into the minds of
his followers acquired in his party the posi-
tion of a Gladstone. This was the first
and fundamental victory, the reinstatement
of the idea of Right in the mind of
Liberalism. Then, as the Conservative attack
developed and its implications became appar-
ent, one interest after another of the older

THE FUTURE OF LIBERALISM 223

Liberalism was rudely shaken into life. The
Education Act of 1902 brought the Non-
conformists into action. The Tariff Reform
movement put Free Trade on its defence,
and taught men to realize what the older
economics of Liberalism had done for them.
The Socialists of practical politics, the Labour
Party, found that they could by no means
dispense with the discipline of Cobden. Free
Trade finance was to be the basis of social
reform. Liberalism and Labour learned to
co-operate in resisting delusive promises of
remedies for unemployment and in maintain-
ing the right of free international exchange.
Meanwhile, Labour itself fiad experienced the
full brunt of the attack. It had come not
from the politicians but from the judges, but
in this country we have to realize that within
wide limits the judges are in effect legislators,
and legislators with a certain persistent bent
which can be held in check only by the con-
stant vigilance and repeated efforts of the
recognized organ for the making and repeal
of law. In destroying the old position of
the Trade Unions, the judges created the
modem Labour party and cemented its alli-
ance with Liberalism. Meaii while, the after-

224 LIBERALISM

math of Imperialism in South Africa was
reaped, and Conservative disillusionment un-
locked the floodgates for the advancing tide
of the Liberal revival.

The tide has by no means spent itself. If it
no longer rushes in an electoral torrent as in
1906 it flows in a steady stream towards social
amelioration and democratic government. In
this movement it is now sufficiently clear to
all parties that the distinctive ideas of
Liberalism have a permanent function. The
Socialist recognizes with perfect clearness, for
example, that popular government is not a
meaningless shibboleth, but a reality that has
to be maintained and extended by fighting.
He is well aware that he must deal with the
House of Lords and the Plural vote if he is to
gain his own ends. He can no longer regard
these questions as difficulties interposed by
half-hearted Liberals to distract attention from
the Social problem. He is aware that the
problem of Home Rule and of devolution
generally is an integral part of the organiza-
tion of democracy. And, as a rule, he not
merely acquiesces in the demand of women
for a purely political right, but only quarrels
with the Liberal party for its tardiness in

THE FUTURE OF LIBERALISM 225

meeting the demand. The old Liberal idea of
peace and retrenchment again is recognized
by the Socialistic, and indeed by the whole
body of social reformers, as equally essential
for the successful prosecution of their aims.
Popular budgets will bring no relief to human
suffering if the revenues that they secure are
all to go upon the most expensive ship that
is the fashion of the moment, nor can the
popular mind devote itself to the improve-
ment of domestic conditions while it is dis-
tracted either by ambitions or by scares.
On the other side, the Liberal who starts from
the Gladstonian tradition has in large measure
realized that if he is to maintain the essence
of his old ideas it must be through a process
of adaptation and growth. He has learnt
that while Free Trade laid the foundations
of prosperity it did not erect the building.
He has to acknowledge that it has not solved
the problems of unemployment, of under-
payment, of overcrowding. He has to look
deeper into the meaning of liberty and to take
account of the bearing of actual conditions on
the meaning of equality. As an apostle of
peace and an opponent of swollen armaments,
he has come to recognize that the expenditure
H

226 LIBERALISM

of the social surplus upon the instruments of
progress is the real alternative to its expendi-
ture on the instruments of war. As a Temper-
ance man he is coming to rely more on the
indirect effect of social improvement on the
one hand and the elimination of monopohst
profit on the other, than on the uncertain
chances of absolute prohibition.

There are, then, among the composite forces
which maintained the Liberal Government in
power through the crisis of 1910, the elements
of such an organic view as may inspire and
direct a genuine social progress. LiberaHsm
has passed through its Slough of Despond, and
in the give and take of ideas with Sociahsm has
learnt, and taught, more than one lesson. The
result is a broader and deeper movement in
which the cooler and clearer minds recognize
below the differences of party names and in
spite of certain real cross-currents a genuine
unity of purpose. What are the prospects of
this movement ? Will it be maintained ? Is
it the steady stream to which we have com-
pared it, or a wave which must gradually sink
into the trough ?

To put this question is to ask in effect
whether democracy is in substance as well as

THE FUTURE OF LIBERALISM 227

in form a possible mode of government. To
answer this question we must ask what demo-
cracy really means, and why it is the necessary
basis of the Liberal idea. The question has
already been raised incidentally, and we have
seen reason to dismiss both the individualist
and the Benthamite argument for popular
government as unsatisfactory. We even ad-
mitted a doubt whether some of the concrete
essentials of liberty and social justice might
not, under certain conditions, be less fully
realized under a widely-extended suffrage than
under the rule of a superior class or a well-
ordered despotism. On what, then, it may
be asked, do we found our conception of
democracy ? Is it on general principles of
social philosophy, or on the special conditions
of our own country or of contemporary civil-
ization ? And how does our conception relate
itself to our other ideas of the social order ?
Do we assume that the democracy will in
the main accept these ideas, or if it rejects
them are we willing to acquiesce in its decision
as final ? And in the end what do we expect ?
Will democracy assert itself, will it find a
common purpose and give it concrete shape ?
Or will it blunder on, the passive subject of

228 LIBERALISM

scares and ambitions, frenzies of enthusiasm
and dejection, clay in the hands of those
whose profession it is to model it to their
will.

First as to the general principle. Demo-
cracy is not founded merely on the right or
the private interest of the individual. This
is only one side of the shield. It is founded
equally on the function of the individual
as a member of the community. It founds
the common good upon the common will, in
forming which it bids every grown-up, intelli-
gent person to take a part. No doubt many
good things may be achieved for a people
without responsive effort on its own part. It
may be endowed with a good police, with an
equitable system of private law, with educa-
tion, with personal freedom, with a well-
organized industry. It may receive these
blessings at the hands of a foreign ruler, or
from an enlightened bureaucracy or a bene-
volent monarch. However obtained, they
are all very good things. But the democratic
theory is that, so obtained, they lack a vitaliz-
ing element. A people so governed resembles
an individual who has received all the external
gifts of fortune, good teachers, healthy sur-

THE FUTURE OF LIBERALISM 229

roiindings, a fair breeze to fill his sails, but
owes his prosperous voyage to little or no
effort of his own. We do not rate such a man
so high as one who struggles through adver-
sity to a much less eminent position. What
we possess has its intrinsic value, but how
we came to possess it is also an important
question. It is so with a society. Good
government is much, but the good will is
more, and even the imperfect, halting, con-
fused utterance of the common will may have
in it the potency of higher things than a
perfection of machinery can ever attain.

But this principle makes one very large
assumption. It postulates the existence of a
common will. It assumes that the individuals
whom it would enfranchise can enter into the
common life and contribute to the formation
of a common decision by a genuine interest in
public transactions. Where and in so far as^
this assumption definitely fails, there is no case
for democracy. Progress, in such a case, is not
wholly impossible, but it must depend on the
number of those who do care for the things
that are of social value, who advance know-
ledge or " civilize life through the discoveries
of art," or form a narrow but effective public

230 LIBERALISM

opinion in support of liberty and order. We
may go further. Whatever the form of govern-
ment progress always does in fact depend on
those who so think and live, and on the degree
in which these common interests envelop
their life and thought. Now, complete and
wholehearted absorption in public interests is
rare. It is the property not of the mass but
of the few, and the democrat is well aware that
it is the remnant which saves the people. He
subjoins only that if their effort is really to
succeed the people must be willing to be saved.
The masses who spend their toilsome days in
mine or factory struggling for bread have
not their heads for ever filled with the complex
details of international policy or industrial
law. To expect this would be absurd. What
is not exaggerated is to expect them to respond
and assent to the things that make for the
^moral and material welfare of the country,
and the position of the democrat is that the
" remnant " is better occupied in convincing
the people and carrying their minds and wills
with it than in imposing on them laws which
they are concerned only to obey and enjoy.
At the same time, the remnant, be it never so
select, has always much to learn. Some men

THE FUTURE OF LIBERALISM 231

are much better and wiser than others, but
experience seems to show that hardly any man
is so much better or wiser than others that
he can permanently stand the test of irre-
sponsible power over them. On the contrary,
the best and wisest is he who is ready to go to
the humblest in a spirit of inquiry, to find out
what he wants and why he wants it before
seeking to legislate for him. Admitting the
utmost that can be said for the necessity of
leadership, we must at the same time grant
that the perfection of leadership itself lies in
securing the willing, convinced, open-eyed
support of the mass.

Thus individuals will contribute to the
social will in very varying degrees, but the
democratic thesis is that the formation of such
a will, that is, in effect, the extension of intelli-
gent interest in all manner of public things, is
in itself a good, and more than that, it is a
condition qualifying other good things. Now
the extension of interest is not to be created
by democratic forms of government, and if it
neither exists nor can be brought into exist-
ence, democracy remains an empty form and
may even be worse than useless. On the
other hand, where the capacity exists the

232 LIBERALISM

establishment of responsible government is
the first condition of its development. Even
so it is not the sole condition. The modern
State is a vast and complex organism. The
individual voter feels himself lost among the
millions. He is imperfectly acquainted with
the devious issues and large problems of the
day, and is sensible how little his sohtary vote
can affect their decision. What he needs to
give him support and direction is organization
with his neighbours and fellow workers. He
can understand, for example, the affairs of his
trade union, or, again, of his chapel. They are
near to him. They affect him, and he feels that
he can affect them. Through these interests,
again, he comes into touch with wider ques-
tions— with a Factory Bill or an Education
Bill — and in deahng with these questions he
will now act as one of an organized body, whose
combined voting strength will be no negligible
quantity. Responsibility comes home to him,
and to bring home responsibility is the problem
of all government. The development of social
interest — and that is democracy — depends not
only on adult suffrage and the supremacy
of the elected legislature, but on all the
intermediate organizations which Hnk the

THE FUTURE OF LIBERALISM 233

individual to the whole. This is one among
the reasons why devolution and the revival
of local government, at present crushed in
this country by a centralized bureaucracy,
are of the essence of democratic progress.

The success of democracy depends on the
response of the voters to the opportunities
given them. But, conversely, the oppor-
tunities must be given in order to call forth
the response. The exercise of popular govern-
ment is itself an education. In considering
whether any class or sex or race should be
brought into the circle of enfranchisement,^
the determining consideration is the response
which that class or sex or race would be
likely to make to the trust. Would it enter
effectively into the questions of pubhc life^
or would it be so much passive voting
material, wax in the hands of the less scrupu-
lous politicians ? The question is a fair one,
but people are too ready to answer it in the
less favourable sense on the ground of the
actual indifference or ignorance which they
find or think they find among the unenfran-
chised. They forget that in that regard
enfranchisement itself may be precisely the
stimulus needed to awaken interest, and while

H 2

234 LIBERALISM

they are impressed with the danger of admit-
ting ignorant and irresponsible, and perhaps
corruptible voters to a voice in the government,
they are apt to overlook the counterbalancing
danger of leaving a section of the community
outside the circle of civic responsibility. The
actual work of government must affect, and
also it must be affected by, its relation to all
who hve within the realm. To secure good
adaptation it ought, I will not say to reflect,
but at least to take account of, the dispositions
and circumstances of every class in the popula-
tion. If any one class is dumb, the result
is that Government is to that extent unin-
formed. It is not merely that the interests
of that class may suffer, but that, even with
the best will, mistakes may be made in hand-
ling it, because it cannot speak for itself.
Officious spokesmen will pretend to represent
its views, and will obtain, perhaps, undue
authority merely because there is no way
of bringing them to book. So among our-
selves does the press constantly represent
public opinion to be one thing while the
cold arithmetic of the polls conclusively
declares it to be another. The ballot alone
effectively hberates the quiet citizen from

THE FUTURE OF LIBERALISM 235

the tyranny of the shouter and the wire-
puller.

I conclude that an impression of existing
inertness or ignorance is not a sufficient reason
for withholding responsible government or
restricting the area of the suffrage. There
must be a well-grounded view that political
incapacity is so deep-rooted that the extension
of political rights would tend only to facilitate
undue influence by the less scrupulous sections
of the more capable part of the people.
Thus where we have an oligarchy of white
planters in the midst of a coloured population,
it is always open to doubt whether a general
colour-franchise will be a sound method of
securing even-handed justice. The economic
and social conditions may be such that the
" coloured " man would just have to vote as his
master told him, and if the elementary rights
are to be secured for all it may be that a semi-
despotic system like that of some of our
Crown colonies is the best that can be devised.
On the other side, that which is most apt
to frighten a governing class or race, a clamour
on the part of an unenfranchised people for
political rights, is to the democrat precisely
the strongest reason that he can have in the

236 LIBERALISM

absence of direct experience for believing them
fit for the exercise of civic responsibility.
He welcomes signs of dissatisfaction among
the disfranchised as the best proof of awaken-
ing interest in public affairs, and he has none
of those fears of ultimate social disruption
which are a nightmare to bureaucracies be-
cause experience has sufficiently proved to
him the healing power of freedom, of
responsibility, and of the sense of justice.
Moreover, a democrat cannot be a democrat
for his own country alone. He cannot but
recognize the complex and subtle interactions
of nation upon nation which make every local
success or failure of democracy tell upon other
countries. Nothing has been more encourag-
ing to the Liberalism of Western Europe in
recent years than the signs of political awaken-
ing in the East. Until yesterday it seemed
as though it would in the end be impossible
to resist the ultimate " destiny " of the
white races to be masters of the rest of the
world. The result would have been that,
however far democracy might develop within
any Western State, it would always be con-
fronted with a contrary principle in the rela-
tion of that State to dependencies, and this

THE FUTURE OF LIBERALISM 237

contradiction, as may easily be seen by the
attentive student of our own political con-
stitutions, is a standing menace to domestic
freedom. The awakening of the Orient, from
Constantinople to Pekin, is the greatest and
most hopeful political fact of our time, and
it is with the deepest shame that English
Liberals have been compelled to look on
while our Foreign Office has made itself the
accomplice in the attempt to nip Persian
freedom in the bud, and that in the
interest of the most ruthless tyranny that
has ever crushed the liberties of a white

people.

The cause of democracy is bound up with

that of internationalism. The relation is

many-sided. It is national pride, resentment,

or ambition one day that sweeps the public

mind and diverts it from all interest in

domestic progress. The next day the same

function is performed no less adequately by

a scare. The practice of playing on popular

emotions has been reduced to a fine art which

neither of the great parties is ashamed to

employ. Military ideals possess the mind,

and military expenditure eats up the public

resources. On the other side, the political

238 LIBERALISM

economic and social progress of other nations
reacts on our own. The backwardness of
our commercial rivals in industrial legislation
was long made an argument against further
advances among ourselves. Conversely, when
they go beyond us, as now they often do, we
can learn from them. Physically the world
is rapidly becoming one, and its unity must
ultimately be reflected in political institutions.
The old doctrine of absolute sovereignty is
dead. The greater States of the day exhibit
a complex system of government within
government, authority limited by authority,
and the world-state of the not impossible future
must be based on a free national self-direction
as full and satisfying as that enjoyed by
Canada or Australia within the British Empire
at this moment. National emulation will
express itself less in the desire to extend
territory or to count up ships and guns, and
more in the endeavour to magnify the con-
tribution of our own country to civilized life.
Just as in the rebirth of our municipal life we
find a civic patriotism which takes interest
in the local university, which feels pride in
the magnitude of the local industry, which
parades the lowest death rate in the country.

THE FUTURE OF LIBERALISM 239

which is honestly ashamed of a bad record for
crime or pauperism, so as Englishmen we shall
concern ourselves less with the question
whether two of our Dreadnoughts might not
be pitted against one German, and more with
the question whether we cannot equal Ger-
many in the development of science, of educa-
tion, and of industrial technique. Perhaps
even, recovering from our present artificially
induced and radically insincere mood of
national self-abasement, we shall learn to
take some pride in our own characteristic
contributions as a nation to the arts of
government, to the thought, the literature,
the art, the mechanical inventions which
have made and are re-making modern civil-
ization.

Standing by national autonomy and inter-
national equality. Liberalism is necessarily in
conflict with the Imperial idea as it is ordin-
arily presented. But this is not to say that
it is indifferent to the interests of the Empire
as a whole, to the sentiment of unity per-
vading its white population, to all the possi-
bilities involved in the bare fact that a fourth
part of the human race recognizes one flag
and one supreme authority. In relation to

240 LIBERALISM

the self-governing colonies the Liberal of to-
day has to face a change in the situation since
Cobden's time not unlike that which we have
traced in other departments. The Colonial
Empire as it stands is in substance the creation
of the older Liberalism. It is founded on self-
government, and self-government is the root
from which the existing sentiment of unity
has spnmg. The problem of our time is to
devise means for the more concrete and living
expression of this sentiment without impairing
the rights of self-government on which it
depends. Hitherto the " Imperialist " has
had matters all his own way and has cleverly
exploited Colonial opinion, or an appearance
of Colonial opinion, in favour of class ascend-
ancy and reactionary legislation in the mother
country. But the colonies include the most
democratic communities in the world. Their
natural sympathies are not with the Conserva-
tives, but with the most Progressive parties
in the United Kingdom. They favour Home
Rule, they set the pace in social legislation.
There exist accordingly the political con-
ditions of a democratic alliance which it is
the business of the British Liberal to turn to
account. He may hope to make his country

THE FUTURE OF LIBERALISM 241

the centre of a group of self-governing, demo-
cratic communities, one of which, moreover,
serves as a natural link with the other great
commonwealth of English-speaking people.
The constitutional mechanism of the new
unity begins to take shape in the Imperial
Council, and its work begins to define itself
as the adjustment of interests as between
different portions of the Empire and the organ-
ization of common defence. Such a union is
no menace to the world's peace or to the cause
of freedom. On the contrary, as a natural
outgrowth of a common sentiment, it is
one of the steps towards a wider unity
which involves no backstroke against the
ideal of self-government. It is a model, and
that on no mean scale, of the International
State.

Internationalism on the one side, national
self-government on the other, are the radical
conditions of the growth of a social mind
which is the essence, as opposed to the
form, of democracy. But as to form itself
a word must, in conclusion, be said. If
the forms are unsuitable the will cannot
express itself, and if it fails of adequate ex-
pression it is in the end thwarted, repressed

242 LIBERALISM

and paralyzed. In the matter of form the
inherent difficulty of democratic government,
whether direct or representative, is that it is
government by majority, not government by
universal consent. Its decisions are those of
the larger part of the people, not of the whole.
This defect is an imavoidable consequence
of the necessities of decision and the impossi-
bility of securing universal agreement. States-
men have sought to remedy it by applying
something of the nature of a brake upon the
process of change. They have felt that to
justify a new departure of any magnitude
there must be something more than a bare
majority. There must either be a large
majority, two-thirds or three-fourths of the
electorate, or there must be some friction to be
overcome which will serve to test the depth and
force as well as the numerical extent of the
feeling behind the new proposal. In the
United Kingdom we have one official brake,
the House of Lords, and several unofficial
ones, the civil service, the permanent deter-
mined opposition of the Bench to democratic
measures, the Press, and all that we call
Society. All these brakes act in one way only.
There is no brake upon reaction — a lack which

THE FUTURE OF LIBERALISM 243

becomes more serious in proportion as the
Conservative party acquires a definite and
constructive policy of its own. In this situa-
tion the Liberal party set itself to deal with
the official brake by the simple method of
reducing its effective strength, but, to be
honest, without having made up its mind as
to the nature of the brake which it would like
to substitute. On this question a few general
remarks would seem to be in place. The
function of a check on the House of Commons
is to secure reconsideration. Conservative
leaders are in the right when they point to the
accidental elements that go to the constitution
of parliamentary majorities. The programme
of any general election is always composite,
and a man finds himself compelled, for ex-
ample, to choose between a Tariff Reformer
whose views on education he approves, and
a Free Trader whose educational policy he
detests. In part this defect might be reme-
died by the Proportional system to which,
whether against the grain or not, Liberals will
find themselves driven the more they insist on
the genuinely representative character of the
House of Commons. But even a Proportional
system would not wholly clear the issues before

244 LIBERALISM

the electorate. The average man gives his
vote on the question which he takes to be
most important in itself, and which he supposes
to be most likely to come up for immediate
settlement. But he is always liable to find
his expectations defeated, and a Parliament
which is in reality elected on one issue may
proceed to deal with quite another. The
remedy proposed by the Parliament Bill
was a two years' delay, which, it was held,
would secure full discussion and considerable
opportunity for the manifestation of opinion
should it be adverse. This proposal had
been put to the constituencies twice over,
and had been ratified by them if any
legislative proposal ever was ratified. It
should enable the House of Commons, as
the representatives of the people, to decide
freely on the permanent constitution of the
country. The Bill itself, however, does not
lay down the lines of a permanent settlement.
For, to begin with, in leaving the consti-
tution of the House of Lords unaltered it
provides a one-sided check, operating only
on democratic measures which in any case
have to run the gauntlet of the permanent
officials, the judges, the Press, and Society.

THE FUTURE OF LIBERALISM 245

For permanent use the brake must be two-
sided. Secondly, it is to be feared that
the principle of delay would be an insufficient
check upon a large and headstrong majority.
What is really needed is that the people should
have the opportunity of considering a proposal
afresh. This could be secured in either of two
ways : (1) by allowing the suspensory veto of
the Second Chamber to hold a measure over
to a new Parliament; (2) by allowing the
House of Commons to submit a bill in the
form in which it finally leaves the House to a
direct popular vote. It is to my mind
regrettable that so many Liberals should have
closed the door on the Referendum. It is
true that there are many measures to which it
would be ill suited. For example, measures
affecting a particular class or a particular
locality would be apt to go by the board.
They might command a large and enthusiastic
majority among those primarily affected by
them, but only receive a languid assent else-
where, and they might be defeated by a
majority beaten up for extraneous purposes
among those without first-hand knowledge of
the problems with which they are intended to
deal. Again, if a referendum were to work at

246 LIBERALISM

all it would only be in relation to measures of
the first class, and only, if the public con-
venience is to be consulted, on very rare
occasions. In all ordinary cases of insuperable
difference between the Houses, the government
of the day would accept the postponement
of the measure till the new Parliament.
But there are measures of urgency, measures
of fundamental import, above all, measures
which cut across the ordinary lines of party,
and with which, in consequence, our system is
impotent to deal, and on these the direct
consultation of the people would be the most
suitable method of solution.^

What we need, then, is an impartial second
chamber distinctly subordinate to the House
of Commons, incapable of touching finance
and therefore of overthrowing a ministry,
but able to secure the submission of a measure
either to the direct vote of the people or to

^ I need hardly add that financial measures are entirely
unsuited to a referendum. Financial and executive
control go together, and to take either of them out of the
hands of the majority in the House of Commons is not to
reform our system but to destroy it root and branch. The
same is not true of legislative control. There are cases in
which a government might fairly submit a legislative
measure to the people without electing to stand or fall
by it

THE FUTURE OF LIBERALISM 247

the verdict of a second election — ^the govern-
ment of the day having the choice between the
alternatives. Such a chamber might be insti-
tuted by direct popular election. But the
multiphcation of elections is not good for
the working of democracy, and it would be
difficult to reconcile a directly elected house
to a subordinate position. It might, there-
fore, as an alternative, be elected on a propor-
tional system by the House of Commons
itself, its members retaining their seat for
two Parhaments. To bridge over the change
half of the chamber for the present Parliament
might be elected by the existing House of
Lords, and their representatives retiring at
the end of this Parliament would leave the
next House of Commons and every future
House of Commons with one-half of the cham-
ber to elect. This Second Chamber would then
reflect in equal proportions the existing and
the last House of Commons, and the balance
between parties should be fairly held.^ This

^ Probably the best alternative to these proposals is
that of a small directly elected Second Chamber, with a
provision for a joint session in case of insuperable dis-
agreement, but with no provision for delay. This pro-
posal has the advantage, apparently, of commanding a
measure of Conservative support.

248 LIBERALISM

chamber would have ample power of securing
reasonable amendments and would also have
good ground for exercising moderation in
pressing its views. If the public were
behind the measure it would know that in the
end the House of Commons could carry it
in its teeth, whether by referendum or by a
renewed vote of confidence at a general elec-
tion. The Commons, on their side, would
have reasons for exhibiting a conciliatory
temper. They would not wish to be forced
either to postpone or to appeal. As to which
method they would choose they would have
absolute discretion, and if they went to the
country with a series of popular measures
hung up and awaiting their return for ratifica-
tion, they would justly feel themselves in a
strong position. \

So far as to forms. The actual future of
democracy, however, rests upon deeper issues.
It is bound up with the general advance of civil-
ization. The organic character of society is,
we have seen, in one sense, an ideal. In
another sense it is an actuality. That is to
say, nothing of any import affects the social
life on one side without setting up reactions all
through the tissue. Hence, for example, we

THE FUTURE OF LIBERALISM 249

cannot maintain great political progress with-
out some corresponding advance on other
sides. People are not fully free in their
political capacity when they are subject
industrially to conditions which take the life
and heart out of them. A nation as a whole
cannot be in the full sense free while it fears
another or gives cause of fear to another.
The social problem must be viewed as a whole.
We touch here the greatest weakness in
modern reform movements. The spirit of
specialism has invaded political and social
activity, and in greater and greater degree
men consecrate their whole energy to a par-
ticular cause to the almost cynical disregard of
all other considerations. " Not such the help,
nor these the defenders " which this moment
of the world's progress needs. Rather we
want to learn our supreme lesson from the
school of Cobden. For them the political
problem was one, manifold in its ramifications
but undivided in its essence. It was a problem
of realizing liberty. We have seen reason
to think that their conception of liberty was
too thin, and that to appreciate its concrete
content we must understand it as resting
upon mutual restraint and value it as a basis

250 LIBERALISM

of mutual aid. For us, therefore, harmony
serves better as a unifying conception. It
remains for us to carry it through with the
same logical cogency, the same practical
resourcefulness, the same driving force that
inspired the earlier Radicals, that gave fire
to Cobden's statistics, and lent compelling
power to the eloquence of Bright. We need
less of the fanatics of sectarianism and more
of the unifying mind. Our reformers must
learn to rely less on the advertising value of
immediate success and more on the deeper
but less striking changes of practice or of
feeling, to think less of catching votes and
more of convincing opinion. We need a
fuller co-operation among those of genuine
democratic feeling and more agreement as to
the order of reform. At present progress is
blocked by the very competition of many
causes for the first place in the advance.
Here, again, devolution will help us, but what
would help still more would be a clearer sense
of the necessity of co-operation between all
who profess and call themselves democrats,
based on a fuller appreciation of the breadth
and the depth of their own meaning. The
advice seems cold to the fiery spirits, but they

THE FUTURE OF LIBERALISM 251

may come to learn that the vision of justice
in the wholeness of her beauty kindles a pas-
sion that may not flare up into moments
of dramatic scintillation, but bums with the
enduring glow of the central heat.

BIBLIOGRAPHY

Locke. — Second Tieatise on Civil Government (1689).

Paine,— The Rights of Man (1792).

Bentham. — Principles of Morals and Legislation (1789 ?).

J. S. Mill.— Principles of Political Economy (Books IV and V).

On Liberty.

Representative Government.

The Subjection of "Women.

Autobiography.
CoBDEN. — Political Writings.
Bright. — Speeches.
Mazziki. — The Duties of Man.

Thoughts on Democracy in Europe.
Jevons. — The State in Relation to Labour.
T. H. Green.— Principles of Political Obligation.

Liberal Legislation and Freedom of Contract {Works,
vol. iii).
MoRLET. — Life of Cobden.

Life of Gladstone.

F. W. Hirst.— The Manchester School.

G. Lowes Dickinson. — Liberty and Justice.

Prof. H. Jones.- The Working Faith of the Social Reformer.

Pbof. McCunn.— Six Radical Thinkers.

252

INDEX

Association, right of, 37-8
Authoritarian rule, 8-10, 18,
21, 47, 54

Biri;h rate, 181

Charity, State, and Justice,

182
Church and State, 12
City States, 10-13, 16
Civil liberty, 21
Coercion, where justified, 139-

154
Colonies, 41-4, 106, 216, 240
Conservatism, 88, 176, 217

Democracy, future of, 227-
236, 242-51

Economic liberty, 34-8, 157
Education, 32, 40, 154

Imperialism, 215, 221-4, 239
Industry, regulation of, 35-6,

82-8, 93
Inequality, the defence of,

131
Inherited wealth, 197-9
Ireland, 41, 103, 219, 224

Laissez-faire, 78-101

Land question, 82, 95-8, 175-

6, 192-3
Liberalism, beginning of, 19,

51

Manchester school, 57
Mnitarism, 8, 45, 80, 148,

237-9
Mill, J. S., 107-15, 116
Monopolies, 97-100

National liberty, 40-4
Natural order, theory of, 54-64

Feudalism, 15-18

Fiscal liberty, 25-6, 34, 78- Old Age Pensions, 156, 177

81

Foreign policy, 41, 104-5
Freedom, conditions of, 23-4,

28, 31, 58, 91-2, 140, 146

Gladstone, W. E., 102-6
Greece, ancient, 10-13

Habeas Corpus Act, 23

Opinion, Liberty and, 116-23
Organic Concept of Society,
125-30, 135

Peace, International, 80-1 ,

225, 237
Personal liberty, 26-31
Petition of Right, 22
Poor Law, 155. 177-9. 184

253

254

INDEX

Popular sovereignty, 45-8, 64,

112
Poverty line, 162
Progress, nature of, 137
Property, rights of, 94-5, 100,

168, 186, 188
Proportional representation,

114, 243

Referendum, 245-6
Religious liberty, 29-31
Revolutionary Declarations,

60-2
Rome, ancient, 13-14

Second Chamber, the, 242-8
Socialism, 165, 167-72, 191,
211, 215, 219

Social liberty, 31-3, 140
Speculation, 195
Super-tax, 199-201

Temperance, 180, 226
Trade unions, 38, 84, 161, 220,
223

Unemployed, 160
Utilitarianism, 57, 65-77, 107

Wage," "living, 159, 163-4,

177, 205-8
Wealth, social basis of, 187-

91, 194
Women, rights of, 33, 39, 86,

112, 114, 179
Work, right to, 159

Pbintej> is Great Britain by Ricuakd t'l.Ar & Soss. Limitbb,

BBUJiSWICK ST.. STAMrORD ST., 9.S. 1, iSO ULNOAT, SCJTOLK.

Pelmanism as an
Intellectual and Social Factor.

IT is occasionally urged that in the announce-
ments of the Pelman Institute the business
element is predominant, and that other
aspects of Mind Training receive less considera-
tion than they are entitled to.

The reason for this is fairly obvious. Business
or professional progress is, in this workaday world,
a subject which the average man or woman has
very much at heart. Consequently, the financial
value of Pelmanism is the point of primary attrac-
tion for pi'obably 60 per cent, of those who enrol ;
but this circumstance does not in any degree dis-
possess Pelmanism of its supreme importance as
an educational and intellectual factor. Instead of
a few pages of explanation, a fairly lengthy volume
would be required to do justice to this theme —
the higher values of Pelmanism.

Far-seeing readers will be quick to appreciate
this, and will recognise that a system which has
proved of such signal value to the business and
the professional brain-worker must perforce be of
at least equal value to those whose occupation is
mainly intellectual or social. If assurance were
needed upon this point, it is abundantly supplied
by the large number of complimentary letters
received from those who have enrolled for the
Course from other than pecuniary motives : the
amateur and leisured classes being well repre-
sented on the Registers of the Institute.

In many cases, those whose motive originally
was material advancement of some kind have been
quick to discover the deeper meanings and highei

values of Pelmanism — a value far above money.
It would be proper to say that there are many
thousands of both sexes to whom the Pel man
System has been the means of intensifying their
interest and pleasure in existence as probably no
other agency could have done.

The charms of literature, and in particular the
beauties of poetry and descriptive writing, are
appreciated by those who adopt Pelmanism as
they never appreciated them before. Every phase
of existence is sensibly expanded. Life receives
a new and deeper meaning with the unfolding of
the latent powers of the mind.

In developing latent (and often unsuspected)
povvers of the mind, Pelmanism has not infrequently
been the means of changing the whole current of
a life.

Again, there are numbers who avow their
indebtedness to the Pelman Course in another
direction — it has led them to examine themselves
anew, to recognise their points of weakness or
strength, and to introduce aim and purpose into
their lives. Indeed, it is surprising how many men
and women, including some of high intellectual
capacity and achievement, are " drifting " through
life with no definite object. This reveals a defect
in our educational system, and goes far to justify
the enthusiasm of those — and they are many —
who urge that the Pelman System should be
an integral part of our national education. Self-
recognition must precede self-realisation, and no
greater tribute to Pelmanism could be desired
than the frequency of the remark, " I Icnow myself
now : I have never really done so before,"

As a svstem, Pelmanism is distinguished by its
inexhaustible adaptability. It is this which makes

ii

it of value to the University graduate equally with
the salesman, to the woman of leisure and to the
busy financier, to the Army officer and to the
commercial clerk. The Pelmanist is in no danger
of becoming stereotyped in thought, speech, or
action : on the contrary, individuality becomes
more pronounced. Greater diversity of " char-
acter" would be apparent amongst fifty Pelmanists
than amongst any fifty people who had not studied
the Course.

The system is, in fact, not a mental strait-jacket
but an instrument: instead of attempting to impose
universal ideals upon its students, it shows them
how to give practical effect to their own ideals
and aims. It completes man or woman in the
mental sense, just as bodily training completes
them in the physical sense.

There are many who adopt it as a means of
regaining lost mental activities. Elderly men and
women whose lives have been so fully occupied
with business, social, or household matters that
the intellectual side has been partly or wholly
submerged : successful men in the commercial
world whose enterprises have heretofore left them
too little leisure to devote to self-culture : Army
officers who find that the routine of a military life
invites intellectual stagnation — these find that the
Pel man Course offers them a stairway up to the
higher thin2;s of life.

Here are two letters which emphasise this. The
first is from an Army student, who says :

The Course has prevented me becoming slack
and stagnating during my Army life — this is
a most virulent danger, I may add. It incul-
cates a clear, thorough, courageous method of
playing the game of Life — admirably suited
iii

to the English temperament, and should
prove moral salvation to many a business man.
" Success," too, would follow — but I consider
this as secondary.

The other letter is from a lady of independent
means who felt that, at the age of fifty, her mind
was becoming less active :

Though leading a busy life, my income is in-
herited, not earned. My object in studying
Pelman methods was not, therefore, in any
way a professional one, but simply to improve
my memory and mental capacity, which, at
the age of fifty, were, I felt, becoming dull
and rusty.

I have found the Course not only most interest-
ing in itself, but calculated to give a mental
stimulus and keenness and alertness to one's
mind, which is just what most people feel the
need of at my age.

In short, it is not merely the fleeting interest
of a day that is served by the adoption of
Pelmanism, but the interest of a lifetime. One
may utilise the Course as a means of achieving
some immediate purpose — financial, social, educa-
tional, or intellectual, — but the advantages of the
training will not end there. The investment of
time will bear rich fruit throughout life, and, in
addition to serving a present purpose, will enable
many a yet unformed ideal to be brought within
the gates of Realisation.

" Mind and Memory "" (in which the Pelman
Course is f^dly described^ with a synopsis of the
lessons) will he sent, gratis aoid post free, together
with afidl reprint of'"'' TridKs'''' Report, on applica-
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